After conducting a careful regression analysis of the demand function for your product, you estimate the demand
Fantastic news! We've Found the answer you've been seeking!
Question:
After conducting a careful regression analysis of the demand function for your product, you estimate the demand equation for your product as follows:
Q = 240 - 4P + 2M + 1PR+ 1A
Where:Pis the price of pencils
Mis buyers' average income.
PRis the price of related (rival) good.
Ais the level of advertising.
Suppose thatP= $10,PR= $10,A= $10, andM= $20.
Are you maximizing your revenue? If not, what is the revenue maximizing price and quantity of your product?
Related Book For
Managerial Economics Theory Applications and Cases
ISBN: 978-0393912777
8th edition
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
Posted Date: