Question
Suppose you are in charge of pricing your companys product. Fortunately, the marketing department has already identified the conditions you will face next period. If
Suppose you are in charge of pricing your companys product. Fortunately, the marketing department has already identified the conditions you will face next period.
If you charge $90 per unit, you will sell 112,426 units, but will run out of inventory.
If you charge $95, you will sell 109,203 units.
If you charge $100, you will sell 104,003 units.
If you charge $105, you will sell 98,802 units.
If you charge $110 per unit, you will sell 93,602 units.
Assume the demand curve has a constant slope. If you had sufficient inventory, how many units would you sell at $90?
Assume your marginal cost is $44 per unit. Given only this and the above information, what price should you charge?
Explain your reasoning.
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