A manufacturer of mp3 players is preparing to set the price on a new model. Dema

Question

A manufacturer of mp3 players is preparing to set the price on a new model. Demand is thought to depend on the price and is represented by the model D = 2,000 - 3P The accounting department estimates that the total costs can be represented by C = 5,000 + 4D.

Develop a spreadsheet model. Apply the principles of spreadsheet engineering in developing your model. Use the spreadsheet to create a table for a range of prices to help you identify the price that results in the maximum
revenue.

Parameters                              Parameters

2000,    -3                                 5000, 4

  

Price               Demand                   Total Costs                        Total Revenue                                         Total   Profit              $100.00 $200.00 $300.00 $400.00 $500.00 600.00

Explanation / Answer

as we can see from the spreadsheet abovee we get maximum revenue and profit for a price of $300

price demand [D = 2000-3P] total cost [C = 5000+4D] total revenue [Demand * price] total profit [total revenue - total cost] $100 1700 11800 170000 158200 $200 1400 10600 280000 269400 $300 1100 9400 330000 320600 $400 800 8200 320000 311800 $500 500 7000 250000 243000 $600 200 5800 120000 114200

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.