Explore BrainMass
Share

Explore BrainMass

    Maximazation

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

    You are a manager at the Daimler-Chrysler. Daimler-Chrysler has lost money on the Smart Car since the first model rolled off the assembly line in 1998. By bringing its little car into the huge U.S. market, the firm hopes to reverse its fortunes. Former race car driver Roger Penske has signed on to develop a network of up to 50 Smart dealerships across the U.S. Penske says the car is not just smart, it is also safe.

    If your marketing department estimates that the annual demand for the Smart Car is Q = 200,000 - 8.0P, what price should you charge in order to maximize revenues from sales of the Smart Car?

    © BrainMass Inc. brainmass.com October 10, 2019, 2:14 am ad1c9bdddf
    https://brainmass.com/economics/international-economics/maximizing-revenue-daimler-chrysler-smart-car-368482

    Solution Preview

    We know that revenue = price X quantity. Since Q = 200,000 - ...

    Solution Summary

    Provides steps necessary to calculate the price that should be changed in order to maximize revenues from sales of the Smart Car.

    $2.19