CIMA P2 Chapter 15 Test – Pricing

Hi, Thanks for your question.
if you have watched the lectures – you should be familiar with the expression:

P = a -bQ

where P is price ( which you are trying to find out)
Q is quantity – in your case 225 units.

‘a’ and ‘b’ must be calculated using the existing data which is given….

a = current price + ((current qty/ change in qty when price changes by $z) *$z)

therefore using the info given
a = 27 +(150/50)*$3)
a = 36

b = change in price / change in quantity
b = 3 / 50
b = 0.06

so the full expression here is:
P = 36 – 0.06Q
so if Q = 225
then
P = 36 – 0.06*225
P = 36 – 13.5
P = 22.5

I hope this helps ?