Question

6.A manufacturer of DVD players has been selling 800 each week at 150$each. From a market survey it is discovered that for each $5 reduction in price, they will sell an extra 40DVD players each week.
a)What is the demand function?
b)How large a reduction in price (rebate) should the manufacturer give a buyer so that revenue will be maximised?

the answers are:
a)p(x)=250 - (x/8)
and
b) 25$

Answer 1

a) my profit equation was
P(x) = (800+40x)(150-5x) where x is the number of $5 reductions

b) I differentiated and set that equal to zero to get x=5
so there are 5 reductions of $5 or $25 , as you had

Answer 2

thank you