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Pricing Decision

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Pricing Decision

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 31, 2016 at 5:33 am #336435
    khuramch
    Member
    • Topics: 41
    • Replies: 29
    • ☆☆

    I revise this question too much time but cant understand..plz help…
    Market research into demand for the product indicates that when the selling price per unit is $145,demand in each period will be 5000 and if the price is $120,demand will be 11250 units.It is assumed that the demand function is linear.The variable cost per unit is $27
    What selling price should be charged in order to maximise the profit??
    i know the price equation is P=a-bq ….But i cant able to find the a=Price when demand is 0

    August 31, 2016 at 7:03 am #336462
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    b = (145 – 120) / (11250 – 5000) = 0.004

    a = 145 + (0.004 x 5000) = 165

    ( or, if you prefer, a = 120 + (0.004 x 11250) = 165 )

    Have you watched my free lectures on pricing? The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.

    September 1, 2016 at 3:55 am #336662
    khuramch
    Member
    • Topics: 41
    • Replies: 29
    • ☆☆

    NO sir i am not take your lecture because i am regular student in one of ACCA gold colleges..But i reaalise that your lectures are also very helpful..
    Many many thanks sir for your help

    September 1, 2016 at 7:20 am #336718
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    You are welcome 🙂

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