Ahlia Co manufactures mobile phones. It has been extremely successful in the past, butthe market has become extremely competitive. The company is considering a numberof different strategies to improve its profitability. The most successful product is theY99 which is sold for SI10. Weekly demand is currently 20,000 phones Marketresearch has revealed that if Ahlia Co roduced the price of the Y99 by S10, demandwould increase by 2,000 phones.The product has a constant varimble cost per unit of $60,Instructions:1. Determine the demand furnction. a2. Determine che output level to maximize profit (A3. Determine the price to be charged to maximize profit. (

P1=$110 Q1=20,000 phones P2=$100 Q2=22,000 phones MC=$60 1. To find demand function, we will use…

Answered: Ahlia Co manufactures mobile phones. It…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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k : ces As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 50 percent chance of low demand and a 50 percent chance of high demand. The corresponding (inverse) demand functions for these two scenarios are P= 300,000-400Q and P= 500,000 -225Q, respectively. Your cost function is CQ) = 165,000+ 243,750Q. How many new homes should you build, and what profits can you expect? Number of homes you should build: homes Profits you can expect: $1

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