TR Co is reviewing its pricing policy in light of the changing market. It has carried out some market research in an attempt to establish an optimum price for Parapain. The research has established that for every $2 decrease in price, demand would be expected to increase by 5,000 bathes, with maximum demand for Parapain being one million batches.
how is P=0 here , i didnt understand
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172 BPP
2y ago
2y ago#1We assume the demand price relationship is linear. The lower the price then the more the demand. The lowest possible price is 0, and therefore that is the price at which the demand will be a maximum.
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