A company specializing in a mail-order sales approach is beginning a promotional campaign. Advertising expenditures will cost
Question:
A company specializing in a mail-order sales approach is beginning a promotional campaign. Advertising expenditures will cost the firm $5,950 per day. Marketing specialist estimate that the rate at which profit (exclusive of advertisement costs) will be generated from the promotion campaign decreases over the length of the campaign. Specifically, the rate r(t) for this campaign is estimated by the function: r(t) = -50ť + 10,000 where t represents the day of the campaign and r(t) is measured in dollars per day. In order to maximize net profit, the firm should conduct the campaign as long as r(t) exceeds the daily advertisement cost.
a) Graph the function r(t) and the function c(t) = 5,950, which describes the rate at which advertising expenses are incurred.
b) How long should the campaign be conducted?
c) What are total advertising expenditures expected to equal during the campaign?
d) What net profit will be expected?
Elementary Statistics Picturing the World
ISBN: 978-0321911216
6th edition
Authors: Ron Larson, Betsy Farber