Please make your selection... 1.Choice One 2.Choice Two 3.Choice Three.

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Presentation transcript:

Please make your selection... 1.Choice One 2.Choice Two 3.Choice Three

Willingness to pay for an IPOD

Which price maximizes revenue? 1. $ $ $ $ $200 6.$150

Total Revenue Maximization

Price and Revenue

Demand Curve for Ipods

Elasticity along demand curve

Total Revenue and quantity

If Marginal cost is $50, which price maximizes profits? 1.$350 2.$300 3.$250 4.$200 5.$150

Profit with $50 Marginal Cost per unit

Profit with $100 Marginal Cost per unit

If wholesale price is 80% of retail price and marginal cost is $50, what price maximizes Apple’s profits? 1.$350 2.$300 3.$250 4.$200 5.$150

Profit with $50 Marginal Cost: Wholesale price 80% of retail

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