A manufacturer of a certain brand of appliance estimates that he can sell 5000 units / year at 900 dollar

certain-brand

#1

A manufacturer of a certain brand of appliance estimates that he can sell 5000 units / year at 900 dollar each and that he can sell 1500 units more per year fir each 100 dollar decrease in price. What price per unit will give the greatest return?

Answer:

Since in the given problem, the value of the item decrease with increase in every 1500 items in year.
Now we find for x=0,1,2,3,4,5,6,7,8
Generally we have price=900-100x and demand=5000+1500x and revenue=price*demand
X value Price Demand Revenue
0 900 5000 45,00,000
1 800 6500 52,00,000
2 700 8000 56,00,000
3 600 9500 57,00,000
4 500 11000 55,00,000
5 400 12500 50,00,000
6 300 14000 42,00,000
7 200 15500 31,00,000
8 100 17000 17,00,000

Therefore the revenue will be more when he sells the items 9500 /year at the rate of 600 per item.