Ahlia Co manufactures mobile phones. It has been extremely successful in the past, but the market has become extremely competitive. The company is considering a number of different strategies to improve its profitability. The most successful product is the Y99 which is sold for $110. Weekly demand is currently 20,000 phones, Market research has revealed that if Ahlia Co reduced the price of the Y99 by $10, demand would increase by 2,000 phones. The product has a constant variable cost per unit of $60. Instructions: 1.Determine the demand function. 2. Determine the output level to maximize profit. 3. Determine the price to be charged to maximize profit.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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 Ahlia Co manufactures mobile phones. It has been extremely successful in the past, but the market has become extremely competitive. The company is considering a number of different strategies to improve its profitability. The most successful product is the Y99 which is sold for $110. Weekly demand is currently 20,000 phones, Market research has revealed that if Ahlia Co reduced the price of the Y99 by $10, demand would increase by 2,000 phones. The product has a constant variable cost per unit of $60. Instructions:

1.Determine the demand function.

2. Determine the output level to maximize profit.

3. Determine the price to be charged to maximize profit. 

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