Question 7 A company sells a product and price the product based on the demand annually. Analysis indicated that is the company increases price by $25 demand will fall by 100 units. The current selling price per unit is $550. At this level 1,000 units are demanded. The product has the following cost structure per unit: Direct material Direct labour Direct expenses Variable overheads Fixed overheads Variable selling expense Fixed selling expenses $75 $25 $50 $30 $100 $20 $150 Management wants to know is optimal production quantity and its maximum profits. Required: (a) Determine the price equation (b) Determine the optimal price and quantity (c) Determine the optimal profits