A manufacturer produces and sells two products, A and B. The unit variable cost is sh.12 and sh.8 for A and B respectively. A review of selling prices is in progress and it has been estimated that, for each product and increase in the selling price would result in a fall in demand of Sh .500 units per every Sh.1 increase in price and similarly a decrease of Sh.1 in price would result in an increase in demand of 500 units. The current sales prices and sales demand are: - Price ( Sh.) Demand (Units) A 30 15,000 B 58 21,000 Required: Calculate the profit - maximizing price for reach product.

A manufacturer produces and sells two products, A and B. The unit variable cost is sh.12 and sh.8 for A and B respectively. A review of selling prices is in progress and it has been estimated that, for each product and increase in the selling price would result in a fall in demand of Sh .500 units per every Sh.1 increase in price and similarly a decrease of Sh.1 in price would result in an increase in demand of 500 units. The current sales prices and sales demand are: - Price ( Sh.) Demand (Units) A 30 15,000 B 58 21,000 Required: Calculate the profit - maximizing price for reach product.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 8SQP

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