Subjects managerial accounting

Revenue Value Pricing 5B3E4F

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1. **State the problem:** We are given a revenue function $$R = 2000 - 1000 \times (P - 2)^2$$ and asked to find the revenue when the price $$P = 2.50$$. 2. **Formula and explanation:** The revenue function shows how revenue changes with price. The term $$(P - 2)^2$$ means revenue decreases as price moves away from 2. 3. **Substitute the given price:** $$R = 2000 - 1000 \times (2.50 - 2)^2$$ 4. **Calculate inside the parentheses:** $$2.50 - 2 = 0.50$$ 5. **Square the difference:** $$0.50^2 = 0.25$$ 6. **Multiply by 1000:** $$1000 \times 0.25 = 250$$ 7. **Subtract from 2000:** $$R = 2000 - 250 = 1750$$ **Final answer:** The revenue at price 2.50 is **1750**. Therefore, the correct choice is **b) 1750**.