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(Solved): An athletic shoe company is developing a new running shoe. The preliminary marketing analysis indic ...



An athletic shoe company is developing a new running shoe. The preliminary marketing analysis indicates price/demand relationship as P=$250-6D. The fixed cost is minimal as the company uses excess manufacturing capacity and could be as low as $10000. The variable cost per unit is estimated to be $30. a)- What is the range of production volume if the company intends to be profitable? b)- What is the optimum production volume to maximize profit? c)- If the company drops the price by 10%, demand increases by 2%. What conclusion do you get from this exercise about the nature of the market this company is engaging in?



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