Reference no: EM132059907

The owner of the new coffee shop Mocha Madness, is trying to decide how much money to spend on advertising. An advertising analyst developed a function R(x) which gives the predicted revenue (in dollars) from sales when x dollars is spent on advertising.

1. Do you expect R'(x)to be positive or negative? Why?
2. The analyst says that R'(1000) = 3. Explain what this means in the given context.
3. Suppose that Mandy Monroe wants to spend roughly $1000 on advertising. Given that R'(1000) = 3, should she spend less than $1000, exactly $1000, or more than $1000 on advertising? Why?
4. Mandy Monroe is also considering a second option in which she would spend roughly $8000 on advertising. The analyst tells her that R'(8000) = 0.6. If she chooses this second option, should she spend less than $8000, exactly $8000, or more than $8000? Why?