One analyst in the company contacts you to inform about a recent analysis of the price– demand relationship. She has done more estimations and concluded that a logit price– response function should be used instead of a simple linear price–

response function. The estimated parameters of the logit model are as follows:

The other information is as given in the previous problems (including a capacity constraint of 2,000 units). What is the optimal price now?

Transcribed Image Text:

(p)= 5,285.3-0.06-p 1+e-0.06-p