As manager of the only renting construction equipment in NY, it has been observed that the demand through Thursday to Saturday in much higher that it is on Sunday through Wednesday.
The demand for equipment during the weekends is:
And the demand during the weekdays is P =25-Q
What pricing strategy you suggest to the manager to maximize his profit assure that the marginal cost of renting any equipment in 5$
(see attachment please)
Profit is price multiplied by the amount sold, which we will call Q. We can multiply the price function by Q to obtain the profit function. Thus we have:
P(Q) = 10Q-0.1 Q^2 on weekends and
P(Q) = 25Q -Q^2 on ...