Using highly sophisticated regression analysis

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Robert Johnson, manager of a Kentucky Fried Chicken franchise, is thinking of introducing barbecued chicken in the product line. Its profitability will be based on the fact that the barbecue sauce will cover up the lack of freshness in leftover chicken. He is thinking of pricing the barbecued chicken at $5 a bucket for 24 pieces. His cost for the same chicken is $3. His fixed cost assignable to the barbecuing operation is $1,500. He plans to spend $400 per period in promoting the new product. Using highly sophisticated regression analysis, he has determined the demand function is: Q = 1250 P M . He estimates that his profit per period will be:

Reference no: EM13736555

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