You are a division manager at Toyota

Accounting Nov 02, 2020

You are a division manager at Toyota. If your marketing department estimates that the semiannual demand for the Highlander is Q= 150,000 — 1.5P, what price should you charge in order to maximize revenues from sales of the Highlander?

Expert Solution

Revenues = (price)(quality)

= (P)(150000-1.5 P)

= 150000 P- 1.5 P²

= 150000- 3 P

Revenues' =slope = 0 at max point

0=150000- 3 P

3 P=150000

P=50000

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