In consultation with members of the economics department at a local college the marketing department has been able to gain some insight into the elasticity of demand for the higher quality product.

In addition, members of the faculty in the materials and logistics department were able to incorporate various economies of scale into the cost estimates. The fixed costs for different size processes as well as the variable cost information is presented with the sales information in table 1.

Table 1

Parameters for Alternative Sales Volumes (Process 1 only)

Option Number	Selling Price	Sales Volume	Fixed Cost	Variable Cost/unit
1	12.5	25,000	50,000	10.00
2	10.00	50,000	75,000	8.00
3	8.25	65,000	85,000	5.0
4	7	75,500	90,000	3.0
5	6	80,750	90,000	2.5

1. What should Goliath do and how much money will they make if their goal is to make as much money as possible?

2. What should Goliath do if their goal is to maximize their return on investment? How much money will they make and what ROI will it generate?

3. What should Goliath do and how much money will they make if their goal is maximize their market share?