1. (16 points) For most products, higher prices result in a decreased demand, whereas lower prices result in an increased demand. Let d = annual demand for a product in units, p = price per unit. Assume that a firm accepts the following price-demand relationship as being realistic: = 900 - 10p, d= where p must be between $20 and $70. a. How many units can the firm sell at the $20 per-unit price? At the $70 per-unit price? b. Show the mathematical model for the total revenue (TR), which is the annual demand multiplied by the unit price. c. Based on other considerations, the firm's management will only consider price alternatives of $30, $40, $50, and $60. Use your model from part (b) to determine the price alternatives that will maximize the total revenue. d. If the firm is free to choose the best price, what would be its choice? What demand level d and TR would be at that price?

1. (16 points) For most products, higher prices result in a decreased demand. whereas lower prices result in an increased demand. Let d= annual demand for a product in units, p= price per unit. Assume that a firm accepts the following price-demand relationship as being realistic: d=90010p, where p must be between $20 and $70. a. How many units can the firm sell at the $20 per-unit price? At the $70 per-unit price? b. Show the mathematical model for the total revenue (TR), which is the annual demand multiplied by the unit price. c. Based on other considerations, the firm's management will only consider price alternatives of $30,$40,$50, and $60. Use your model from part (b) to determine the price alternatives that will maximize the total revenue. d. If the firm is free to choose the best price, what would be its choice? What demand level d and TR would be at that price