B Ltd manufactures blodgets. It has been ascertained that the market for blodgets is follows:
● at unit price £20, no blodgets are demanded or sold;
● at unit price nil, 5,000 blodgets are demanded;
● for price levels intermediate between £20 and nil there is a linear relationship between
price and demand.
The variable cost of manufacturing a blodget is £5 at all levels of output.
Requirements
Calculate the unit selling prices which will: (a) maximise revenue; and (b) maximise profit.
