Suppose a firm had decided to produce a new item to enhance its public offerings. Suppose that it costs $700,000 for manufacturing set-up, advertising and other sundry considerations. Suppose that it costs 110 to make each item. Further suppose that from previous experience of launching new items on the market that the company expects the number of items sold (demand) will be 70,000 – 200 P where P is the price of each bike. Determine the optimal price the company should charge for each item in order to maximise its profit.

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Let the Optimum Price be P TC 700000 11070000200P TR P70000200P Profit K TR TC 7000... View the full answer