Explore BrainMass

Explore BrainMass

    Determining revenue maximizing price

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    You are the manager of the Chevrolet Motor Division of GMC. Your Marketing department estimates that the semi-annual demand for the Chevy Tahoe is Q=100,000-1.25 P. What price do you recommend that GM charge for its Tahoe if its desire is to maximize sales? Draw a graph that illustrates your recommendation.

    © BrainMass Inc. brainmass.com October 10, 2019, 2:18 am ad1c9bdddf

    Solution Preview

    Please refer attached file for graph.


    Total Revenue, TR=P*Q=(80000-0.8Q)*Q=80000Q-0.8Q^2
    Marginal Revenue=MR=d(TR)/dQ=80000-1.6Q
    For Revenue maximization, Put ...

    Solution Summary

    Solution describes the steps to determine the price at which total revenue is maximized.