Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $157,000. Variable processing costs are estimated to be $8 per book. The publisher plans to sell single-user access to the book for $43.

Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is

demand = 4,000 6p,

where p is the price of the e-book.

(a)

Construct an appropriate spreadsheet model for calculating the profit/loss at a given single-user access price taking into account the above demand function. What is the profit estimated by your model for the given costs and single user access price (in dollars).

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(b)

Use Goal Seek to calculate the price (in dollars) that results in breakeven. (Round your answer to the nearest cent.)

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(c)

Use a data table that varies price from $50 to $400 in increments of $25 to find the price (in dollars) that maximizes profit. Please show how to create What If data table

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