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the demand curve for a product is expressed by the formula P=24-0.004Q, where P is the selling price and Q is the quantity demanded per week at that price. at the current sales price of $10 per unit demand per week is 3500 unit. by how much could the company raise the selling price per unit in order to increase total sales revenue per week before total sales revenue per week from the product begin to go into decline.
Please do not simply type out a full question and expect to be provided with a full answer. You must have an answer in the same book in which you found the question and so in future ask about whatever it is in the answer that you are not clear about – then I will explain.
We need to know what selling price will give maximum revenue, and this will occur when the marginal revenue is equal to zero.
Therefore, MR = 24 – 0.008Q = 0.
So Q = 3,000 units.From the price demand equation, this means the selling price for maximum revenue = $12 per units, which is an increase from the current SP of $2 per unit.
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