You are hired as the marketing consultant to Johannesburg Burger Supply, Inc., and you want to come up with unit price for its hamburgers to maximize the weekly revenue. To make life as simple as possible, you suppose that demand equation for Johannesburg hamburgers has linear form q = mp + b, where p is price per hamburger, q is demand in weekly sales, and m and b are certain constants you should determine.
i) The market studies reveal the given sales figures: When price is set at $2.00 per hamburger, sales amount to 7000 per week, but when price is set at $4.00 per hamburger, sales drop to zero. Use the data to compute demand equation.
ii) Evaluate unit price which maximizes weekly revenue.
iii) Forecast what weekly revenue will be at that price.