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.
Price | Demand (in millions) |
---|---|
$200 | 2 |
$300 | 0.9 |
$400 | 0.2 |
What price should we charge for game console?
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?
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.
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?