Problems

1. Suppose it costs $250 to produce a video game console. A price from $200 through $400 is under consideration. Estimated demand for the game console is shown in the following table.

   Open table as spreadsheet

   Price	Demand (in millions)
   $200	2
   $300	0.9
   $400	0.2

   What price should we charge for game console?

2. This problem uses the demand information given in Problem 1. Each game owner buys an average of 10 video games. We earn $10 profit per video game. What price should we charge for the game console?

3. We are trying to determine the correct price for a new weekly magazine. The variable cost of printing and distributing a copy of the magazine is $0.50. We are thinking of charging from $0.50 through $1.30 per copy. The estimated weekly sales of the magazine are shown in the following table.

   Open table as spreadsheet

   Price	Demand (in millions)
   $0.50	2
   $0.90	1.2
   $1.30	0.3

   In addition to sales revenue from the magazine, we can charge $30 per 1000 copies sold for each of the 20 pages of advertising in each week’s magazine. What price should we charge for the magazine?