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Determine the optimal retail price

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The maximum price that the retailer can ask for the new jPad model is $1,500 (i.e., if price were more than this, not a single unit would be sold), and if they were to give them away for nothing, sales would be 12,000 per day. It costs the manufacturer $500 per unit to produce, and the manufacturer sells to the retailer at the manufacturer's cost, simultaneously charging the retailer a flat fee for the opportunity to sell the jPad. What would be the optimal retail price?

Reference no: EM132952483

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