work work work

You are the pricing manager for a company that provides a food delivery service in a city. The drivers pick up an order from one of several closely clustered restaurants and deliver it to a residential address. You will be setting a price per delivery to maximize monthly profits. In this part you will be setting a single price to maximize the company's profit. All you observe is the price, which you set, and the resulting quantity demanded. To solve this problem, you should calculate the profit using a formula that ties to the given values for fixed cost, marginal cost, price, and quantity demanded. Once you have that formula, you can change the price to see how it affects profits. While you could simply iterate until you hit on a high profit, you can also generate the (P, Qd) data needed to estimate the price elasticity of demand and then proceed as in the Hotel Honolulu problem in Assignment 8. Once you have that estimate, you can use the markup formula to get a price. In this part of the assignment, the elasticity isn't constant along the demand function, so the markup pricing rule will only get you close to the profit-maxizing price. You don't need to set the price to the penny. Getting within $0.25 of the profit-maximizing price is sufficient. Fixed cost: 15,000 This is per month. Marginal cost (constant): 3.00 Note: total variable cost is MC x Qd Price: $1.00