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As a marketing department team#4 our primary goal is to make best estimate the price for our new product “DVD player” that will produce the maximum profit and how many of the DVD players that we can expect to sell, and how much profit we might hope to realize from the sales.
In order to price DVD player, we need to estimate;
² The demand for a new DVD player on the national market.
² The cost of production of a new DVD player.
² The revenue in relation to quantity sold.
² The price that is likely to maximize profit.
² How profit changes in response to changes in quantity of DVD players.
² The level of production that will maximize our profit.
Here, we have presented our analysis by using mathematical tools to compute required information.
To produce new DVD player, the first 400,000 units will have production cost of $41.00 per unit. The next 200,000 units will cost $31.00 per unit to produce. After the first 600,000 units can be produced for 23.00 fu...
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