# Question: as sales manager for montevideo productions inc you are planning...

###### Question details

As Sales Manager for Montevideo Productions, Inc., you are planning to review the prices you charge clients for television advertisement development. You currently charge each client an hourly development fee of $2,600. With this pricing structure, the demand, measured by the number of contracts Montevideo signs per month, is 4 contracts. This is down 5contracts from the figure last year, when your company charged only $2,100.

(a) Construct a linear demand equation giving the number of
contracts *q* as a function of the hourly fee
*p*Montevideo charges for development.

q(p) = |

(b) On average, Montevideo bills for 50 hours of production time on
each contract. Give a formula for the total revenue obtained by
charging $*p* per hour.

R(p) = |

(c) The costs to Montevideo Productions are estimated as
follows:

Fixed costs: | $150,000 per month |

Variable costs: | $80,000 per contract |

Express Montevideo Productions' monthly cost as a function of
the number *q* of contracts.

C(q) = |

Express Montevideo Productions' monthly cost as a function of the
hourly production charge *p*.

C(p) = |

(d) Express Montevideo Productions' monthly profit as a function of
the hourly development fee *p*.

P(p) = |

Find the price it should charge to maximize the profit.

*p* = $ __________per hour