Consider the following situation: the demand for the new YPhone (which can be co
ID: 468254 • Letter: C
Question
Consider the following situation: the demand for the new YPhone (which can be considered to operate in a monopoly upon introduction) is given by 10,000 – 5p per day. The costs to produce this new YPhone are $400. Assume that Micrap produces everything in-house and sells the YPhones in their own Micrap stores. The optimal price for this new YPhone can be determined to be $1,200 (feel free to check this!). Determine the daily sales quantity of this new Phone. q = 10,000 q = 1,200 q = 5,000 q = 4,000
Explanation / Answer
Y Phone operate in a monopoly upon introduction
the demand for the new Y Phone per day is given by the following equation
D = 10,000 – 5p
Where we have p = price of the Y Phone = $1,200
Therefore demand D= 10,000 – 5 * 1,200 = 10,000 – 6,000 = 4,000
The daily sales quantity is 4,000