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If demand function is given as the following:  Qz = 230 -2.75 Pz + 0.5 I + 1.2 Pm + 0.6A  Where Qz is quantity of Good z sold, Pz is price of Good z per unit, I is per capita income, Pm is price of competitor and A is the amount of advertising spent.  Current values:  Pz= RM 55 I= RM 9000    Pm= RM 50    A =RM 12,000 a) Should the firm consider giving a price discount in order to increase total revenue?

If demand function is given as the following:  Qz = 230 -2.75 Pz + 0.5 I + 1.2 Pm + 0.6A  Where Qz is quantity of Good z sold, Pz is price of Good z per unit, I is per capita income, Pm is price of competitor and A is the amount of advertising spent.  Current values:  Pz= RM 55 I= RM 9000    Pm= RM 50    A =RM 12,000 a) Should the firm consider giving a price discount in order to increase total revenue?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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If demand function is given as the following: 

Qz = 230 -2.75 Pz + 0.5 I + 1.2 Pm + 0.6A 

Where Qz is quantity of Good z sold, Pz is price of Good z per unit, I is per capita income, Pm is price of competitor and A is the amount of advertising spent. 

Current values:  Pz= RM 55 I= RM 9000    Pm= RM 50    A =RM 12,000

a) Should the firm consider giving a price discount in order to increase total revenue?

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