2) The cost price of a Saturn is $13 000. When the dealer sells each car for $25 000, he sells 21 cars per month. For each reduction of $1000 in the selling price, the dealer sells 3 more cars each month. a) Determine the Profit equation for this function. b) Explain how the profit function was determined. Explain each variable. c) Determine the selling price of a car for maximum monthly profit.
2) The cost price of a Saturn is $13 000. When the dealer sells each car for $25 000, he sells 21 cars per month. For each reduction of $1000 in the selling price, the dealer sells 3 more cars each month. a) Determine the Profit equation for this function. b) Explain how the profit function was determined. Explain each variable. c) Determine the selling price of a car for maximum monthly profit.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter3: Benefits, Costs, And Decisions
Section: Chapter Questions
Problem 3.7IP
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