Question

Please finish the following assignments in Excel Please indicate your result in Excel clearly.

Suppose it costs $250 to produce a video game console. Estimated demand for the game console is shown in the following table. What price should you charge for game console to maximize profit? A price between $200 and $400 is under consideration. (Please use linear demand function)

Price    Demand

$200    50,000

$300    25,000

$400    12,000

Answer 1

Use the following formulation in Excel

Next, use Solver add-in to maximize the Profit by varying the price.

Result:

Price	Demand
$200	50,000
$300	25,000
$400	12,000
Slope	-190
Intercept	86,000
Price	$351.32
Cost	$250
Demand	19,250
Profit	$1,950,329

So, the price should be set at $351.32 to maximize the profit.