Example A.8.2. Revenue.
Avery owns a local organic jam company that currently sells about \(1500\) jars a month at a price of \(\$13\) per jar. Avery has found that for each time they would raise the price of a jar by \(25\) cents, they will sell \(50\) fewer jars of jam per month.
In general, this companyβs revenue can be calculated by multiplying the cost per jar by the total number of jars of jam sold. If we let \(x\) represent the number of times the price was raised by \(25\) cents, then the price will be \(13+0.25x\text{.}\)
At the same time, the number of jars the company sells will be the \(1500\) that they currently sell each month, minus \(50\) times \(x\text{.}\) This gives us the expression \(1500-50x\) to represent how many jars the company will sell after raising the price \(x\) times.
Combining these expressions, we can write a formula for the revenue model:
\begin{align*}
\text{revenue} \amp= \left(\text{price per item}\right)\times\left(\text{number of items sold}\right)\\
R \amp= \left(13+0.25x\right)\left(1500-50x\right)
\end{align*}
To simplify the expression \(\left(13+0.25x\right)\left(1500-50x\right)\text{,}\) weβll need to multiply \(13+0.25x\) by \(1500-50x\text{.}\) In this section, we learn how to do that.
