Question: Assuming a linear demand function, what is the Optimal Price for the calculators? Show work Phil Pfeifer owns a business refurbishing Army Surplus calculators. He

Assuming a linear demand function, what is the Optimal Price for the calculators? Show work
Phil Pfeifer owns a business refurbishing Army Surplus calculators. He has a contract to buy the calculators from government sources and could purchase up to 4,410 a month. His bid of $4.73 per calculator had won the contract to purchase the surplus calculators. He invested $42,400 in an automated engraving machine and started selling personalized calculators through a network of army surplus stores and VFW posts. Pricing was a problem, however. First, he had to consider that, on average, his resellers charged 42% margins and were content to sell at his recommended retail prices as long as they received their margins. Second, he thought it cost him $0.96 in labor and materials to engrave customized messages. For several months he sold an average of 1,260 calculators per month at a retail selling price of $35 per customized calculator. His wife suggested he could watch more lacrosse if he charged higher prices and sold fewer calculators. Phil raised the price to 544 and saw the number of calculators sold drop to 694. (20 points in total, 4 points each) Phil Pfeifer owns a business refurbishing Army Surplus calculators. He has a contract to buy the calculators from government sources and could purchase up to 4,410 a month. His bid of $4.73 per calculator had won the contract to purchase the surplus calculators. He invested $42,400 in an automated engraving machine and started selling personalized calculators through a network of army surplus stores and VFW posts. Pricing was a problem, however. First, he had to consider that, on average, his resellers charged 42% margins and were content to sell at his recommended retail prices as long as they received their margins. Second, he thought it cost him $0.96 in labor and materials to engrave customized messages. For several months he sold an average of 1,260 calculators per month at a retail selling price of $35 per customized calculator. His wife suggested he could watch more lacrosse if he charged higher prices and sold fewer calculators. Phil raised the price to 544 and saw the number of calculators sold drop to 694. (20 points in total, 4 points each)
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