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Quantitative Demand Analysis

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You are a manager at the Chevrolet division of General Motors. If your marketing department estimates that the semiannual demand for the Chevy Tahoe is Q = 100,000 - 1.25P, what price should you charge in order to maximize revenues from sales of the Tahoe?
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Solution Summary

The expert determines at which price will revenues be maximized.

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Rewrite the demand equation in terms of Q, we get P=(100,000 - Q)/1.25
Total Revenue = P*Q =(100,000 - Q)/1.25 ...

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