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    Determining revenue maximizing price

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    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.

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    https://brainmass.com/business/business-management/price-elasticity-revenue-maximization-371228

    Solution Preview

    Please refer attached file for graph.

    Q=100000-1.25P
    1.25P=100000-Q
    P=80000-0.8Q

    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.

    $2.19