Company is launching a new product which it expects to incur a variable cost of $14 per unit.
If the price charged was to be $25 per unit then the demand would be 1,000 units each period. For $1 increase in selling price, demand would reduce by 100 units each period. For every $1 reduction in selling price, the demand would increase by 100 units each period.
Calculate the selling price per unit needed to maximise profit.
Company is launching a new product which it expects to incur a variable cost of $14 per unit.
If the price charged was to be $25 per unit then the demand would be 1,000 units each period. For $1 increase in selling price, demand would reduce by 100 units each period. For every $1 reduction in selling price, the demand would increase by 100 units each period.
Calculate the selling price per unit needed to maximise profit.
Any help will be much appreciated.