Calculating price to maximize revenue and profit, while maximizing market penetration.
Disco is developing a new hard drive for use in HAL-compatible PC’s
They estimate the demand schedule for the new product will be as follows:
Price: 100 80 60 40 20 0
Quantity (000): 0 30 60 90 120 150
The fixed cost will be $ 1000
Unit variable cost will be $ 40.00 per unit.
(a) What is the price that will maximize revenue?
(b) What is the price that will maximize profit?
(c) With the objective of maximizing market penetration in the first year after product introduction, what is the lowest price at which the profit will be no worse than zero?