pricing déčišións Epsilon Enterprise Ltd, a manufacturer of small household appliances, has carried out market research to detemine that if a price of £250 is charged for one of its best-selling products, the Shark, demand will be 12,000 units. Epsilon Enterprise has also established that demand will rise or fall by 5 units for every £1 fall/rise in the selling price of the Shark. The marginal cost of the Shark is £80. The formula for Marginal Revenue (MR) = a - 2bQ when the selling price P = a- bQ, where: P = the price Q = the quantity demanded a = the theoretical maximum price b = change in price/change in quantity (b) Discuss any four factors other than price, that can influence the demand for a product or service.

ENGR.ECONOMIC ANALYSIS
14th Edition
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Chapter1: Making Economics Decisions
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pricing decisions
Epsilon Enterprise Ltd, a manufacturer of small household appliances, has carried out
market research to detemine that if a price of £250 is charged for one of its best-selling
products, the Shark, demand will be 12,000 units.
Epsilon Enterprise has also established that demand will rise or fall by 5 units for every £1
fall/rise in the selling price of the Shark. The marginal cost of the Shark is £80.
The formula for Marginal Revenue (MR) = a - 2bQ when the selling price P a- bQ, where:
P = the price
%3D
Q = the quantity demanded
a = the theoretical maximum price
b = change in price/change in quantity
%3D
(b) Discuss any four factors other than price, that can influence the demand for a product
or service.
Transcribed Image Text:pricing decisions Epsilon Enterprise Ltd, a manufacturer of small household appliances, has carried out market research to detemine that if a price of £250 is charged for one of its best-selling products, the Shark, demand will be 12,000 units. Epsilon Enterprise has also established that demand will rise or fall by 5 units for every £1 fall/rise in the selling price of the Shark. The marginal cost of the Shark is £80. The formula for Marginal Revenue (MR) = a - 2bQ when the selling price P a- bQ, where: P = the price %3D Q = the quantity demanded a = the theoretical maximum price b = change in price/change in quantity %3D (b) Discuss any four factors other than price, that can influence the demand for a product or service.
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