1. Assume that a firm accepts the following price-demand relationship as being a realistic representation of its market Ad = 400 5P

Where Ad= annual demand for a product in units

P=price per unit

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. What happens to annual units demanded for the product if the firm increases the per unit price from $26 to $27? From $42 to $43? From $68 to $69? What is the suggested relationship between per-unit price and annual demand for the product in units?

c. Calculate the mathematical equation for the total revenue (TR), which is the annual demand multiplied by the unit price. Make sure this equation should be a function of price (P)

d. Based on other considerations, the firms management will only consider price alternatives of $30, $40, and $50. Use your equation from part (c) to determine the price alternative that will maximize the total revenue e. What are the expected annual demand and the total revenue according to your recommended price?