Reference no: EM13833427
Suppose you are in charge of pricing your company's product. Fortunately, the marketing department has already identified the conditions you will face next period.
If you charge $90 per unit, you will sell 112,426 units, but will run out of inventory.
If you charge $95, you will sell 109,203 units.
If you charge $100, you will sell 104,003 units.
If you charge $105, you will sell 98,802 units.
If you charge $110 per unit, you will sell 93,602 units.
Assume the demand curve has a constant slope. If you had sufficient inventory, how many units would you sell at $90?
Assume your marginal cost is $44 per unit. Given only this and the above information, what price should you charge?
Explain your reasoning.
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