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.

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kajan81 says

Question in relation to pricing:

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.

immadahmed says

Use formula p=a-bx