Question

Problem 1-11 For most products, higher prices result in a decreased demand, whereas lower prices result in an increased demand. Let d = annual demand for a product in units p = price per unit Assume that a firm accepts the following price-demand relationship as being realistic: d = 800 - 10p where p must be between $20 and $70. How many units can the firm sell at the $20 per-unit price? Round your answer to the nearest whole number.

Answer 1

Step-by-step explanation:

The firm can sell 800 - (10 * 20) = 600 units at the $20 per-unit price.

The firm can sell 800 - (10 * 70) = 50 units at the $70 per-unit price.

Answer 2

The firm will sell 600 units at $20

Step-by-step explanation:

Giving the following information:

d = annual demand for a product in units

p = price per unit

d = 800 - 10p

p must be between $20 and $70.

Elastic demand

We have to calculate how many units the firm will sell at $20

d=800-10*p=800-10*20= 600 units