Question
As the operator of ZSport Fitness gym, you calculate the demand equation to be q = -0.06p + 84 where q is the number of
As the operator of ZSport Fitness gym, you calculate the demand equation to be
q = -0.06p + 84
where q is the number of members in the club and p is the annual membership fee you charge. Your annual operating costs are fixed costs of $20,000 per year and plus and variable cost of $20 per member. Find the annual revenue and profit as functions of the membership price p.
At what price should you set the annual membership fee to obtain maximum revenue? And what is the maximum possible revenue?
At what price should you set the annual membership fee to obtain the maximum profit? What is the maximum possible profit? And what is the corresponding revenue?
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