currently, the demand equation for baseball bats is Q=300-5P. the current price
ID: 1205757 • Letter: C
Question
currently, the demand equation for baseball bats is Q=300-5P. the current price is $15 per bat. is this the best price to charge in order to maximize revenues? If not, indicate what price you should charge and quantity that you should produce in order to maximize revenue. please show all work. currently, the demand equation for baseball bats is Q=300-5P. the current price is $15 per bat. is this the best price to charge in order to maximize revenues? If not, indicate what price you should charge and quantity that you should produce in order to maximize revenue. please show all work. currently, the demand equation for baseball bats is Q=300-5P. the current price is $15 per bat. is this the best price to charge in order to maximize revenues? If not, indicate what price you should charge and quantity that you should produce in order to maximize revenue. please show all work.Explanation / Answer
Q = 300 – 5P
5P = 300 – Q
P = 60 – 0.2Q
Total revenue (TR) = PQ = 60Q – 0.2Q^2
MR = Derivative of TR with respect to Q
= 60 – 0.4Q
TR would be maximum if MR = 0
60 – 0.4Q = 0
0.4Q = 60
Q = 150
Putting Q = 150 in P = 60 – 0.2Q
P = 60 - 0.2 × 150
= 30
Answer: The best price is not $15. The best price is $30 (as calculated above) for maximizing revenue.
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