Normally the selling price of a product, p, is related to, Ask an Expert

Economics

Normally the selling price of a product, p, is related to the demand according to the following relationship: p = a - bD.
However, a company has found that the price (in dollars) of its product can be related to demand, D, according the following different equation:

p = 88.5 - 0.08(D0.75)

Demand is given in units per year. In addition, there is a fixed cost of $40,000 per year and a variable cost to manufacture the product is $40 per unit.

Determine the levels of demand that maximizes (a) total revenue, and (b) profit for this product.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9694688

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