Question

3. Suppose that the demand function for a certain brand of shampoo is D(x) = –1.25x...

3. Suppose that the demand function for a certain brand of shampoo is D(x) = –1.25x + 525. What is the highest price anyone will be willing to pay for the shampoo?

Please include the complete solution.

Homework Answers

Answer #1

ANS: Maximum Price = $ 420. per unit

As given, demand function is D(x) = -1.25x + 525.

As we all know, the company will be ready to set any price as far as there is demand for the product in the market. Alternatively we can say that, as long as the demand function stays positive, so far the price could be changed. But once the demand reach NIL, the company cannot increase the price.

Hence, to find the maximum price that could be charged, we have to find that value of "x" where Demand function =0.

ie,

0 = -1.25x + 525

1.25x = 525

x = 525/1.25 = 420

When Price per unit = $ 420, demand function will be:

D (x=420) = -1.25 ( 420 ) + 525 = -525 + 525 = 0.

  

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. The quantity for a 17-inch LCD TV is 20,000 at a price of Php25,000, while...
1. The quantity for a 17-inch LCD TV is 20,000 at a price of Php25,000, while 45,000 is demanded for the price of Php15,000. Assuming a linear relationship between price and quantity, which of the following models the price-quantity function of the LCD TV? 2. A young entrepreneur is willing to supply 60 pieces of personalized baller band at a price of Php80 and 100 at a price of Php110. Assuming a linear relationship between price and quantity, which of...
The marginal price for a weekly demand of x bottles of shampoo in a drugstore is...
The marginal price for a weekly demand of x bottles of shampoo in a drugstore is given by the function shown below. Find the​ price-demand equation if the weekly demand is 150 when the price of the bottle of shampoo is $8. What is the weekly demand when the price is $7.50? p′(x)=−9,000/(3x+50)^2 Find the​ price-demand equation Find the weekly demand when the price is ​$7.50
4. The cost and revenue function for a particular brand of bag are C(x) = 6x...
4. The cost and revenue function for a particular brand of bag are C(x) = 6x + 3 and R(x) = 19 – 2x. What is the break even point? Please include the complete solution.
1. Suppose the price elasticity of demand for shampoo is 1.8. If the price of shampoo...
1. Suppose the price elasticity of demand for shampoo is 1.8. If the price of shampoo increases by 20%, what would we expect to happen to the quantity of shampoo demanded? Increase by 9% Increase by 36% Decrease by 9%   Decrease by 13% Decrease by 36% 2. Suppose we know that the income elasticity of demand for fast-food meals is -0.5. If a household’s income increased by 100%, the number of fast-food meals they consume will decrease by 200%. True...
The demand function for a certain brand of CD is given by p = −0.01x2 −...
The demand function for a certain brand of CD is given by p = −0.01x2 − 0.2x + 14 where p is the unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. The supply function is given by p = 0.01x2 + 0.7x + 3 where p is the unit price in dollars and x stands for the quantity that will be made available in the market by the supplier, measured...
The demand function for a certain brand of CD is given by p = −0.01x^2 −...
The demand function for a certain brand of CD is given by p = −0.01x^2 − 0.2x + 11 where p is the wholesale unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. The supply function is given by p = 0.01x^2 + 0.4x + 3 where p is the unit wholesale price in dollars and x stands for the quantity that will be made available in the market by the...
The demand function for a certain brand of CD is given by p = −0.01x2 −...
The demand function for a certain brand of CD is given by p = −0.01x2 − 0.1x + 36 where p is the wholesale unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. Determine the consumers' surplus if the market price is set at $6/disc. (Round your answer to two decimal places.)
For a quantity x of a certain product the demand function d(x) and the supply function...
For a quantity x of a certain product the demand function d(x) and the supply function s(x) are given by the formulas: d(x) = 720 − 0.06x^2, s(x) = 0.012x^2. Sketch the graphs of these functions on the same graph and find the market demand, the positive quantity x at which the two curves meet (supply equals demand). For this value of x also compute the producer surplus and the consumer surplus and indicate on your graph which areas these...
The demand function for your brand X shirts is estimated as Qd x = 1,000 -...
The demand function for your brand X shirts is estimated as Qd x = 1,000 - 5 Px - 10 Py + 9 PZ+ 0 .001 I The price of X is $ 10, Y is $ 4, Z is $ 10 and incomes are $ 20,000. 1) What are your sales? ______________ 2) What is the elasticity of demand for X? _______________ 3) What is the cross elasticity between X and Y? ______________ 4) Are X and Y substitutes...
The demand function for your brand X shirts is estimated as Qd x   = 1,000 -...
The demand function for your brand X shirts is estimated as Qd x   = 1,000 - 5 Px - 10 Py + 9 PZ+ 0 .001 I The price of X is $ 10, Y is $ 4, Z is $ 10 and incomes are $ 20,000.    1) What are your sales? ______________ 2) What is the elasticity of demand for X? _______________ ​​​​​ 3) What is the cross elasticity between X and Z? ​​​​​   ______________ 4) Are X...