Charge in order to maximize his sales revenue

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A manufactures of a well-known brand of toothpaste is considering changing the way he prices his tooth paste. Currently, he is selling it at $5.00 per bottle. He hired a college professor of economics to estimate the demand function for the product. The demand function estimated by the professor is given below:

Q_d = 3 - 0.25P

Where P represents the price per bottle.

Is the manufacturer maximizing his sales revenue by charging $5.00 for each bottle? If your answer is no, how much should he charge in order to maximize his sales revenue?

Reference no: EM13743414

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