Calculate the unit selling prices which will: (a) maximise revenue; and (b) maximise profit.

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.

 

find the cost of your paper

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