- This topic has 1 reply, 2 voices, and was last updated 10 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
Interactive BPP books for September 2026 exams, recommended by OpenTuition.
Get discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Vision (PM 12/06, amended)
Hi,
I am struggling to understand how BPP authors have calculated the profit for Birdcam-V. The text is: “The marketing director has estimated that at a selling price of $600 per unit, a total of 85,000 units p.a. would be sold during y/e 30 Nov 20×7 and that each increase/decrease in the selling price of $10 will cause quantity demanded to decrease/increase by 1,000 units. The variable cost per unit is expected to remain constant at $180. […] The directors have agreed to adopt the combination of selling price and output that will maximize profit earned from sales of the Birdcam-V.”
I understand Step 1 where they use demand equation to calculate the price at which demand is zero. P=a-bx => 600=10/1,000*85,000 => a = 1450
Step 2 is substitute a into P=a-bx => P=1450-0.01x
However I don’t understand the following steps.
At Step 3 they derive marginal revenue as MR=1450-0.02x. Where is this 0.02 coming from?
Thank you for your help!
Irina
I’ve answered this on your earlier post. Please don’t post the same query again so soon. We are not your slaves.
