A supplier produces a product at the cost of $0.5 per unit (ie, c=0.5) and sells it to a retaller at the wholesale price
Posted: Fri May 20, 2022 6:27 am
A supplier produces a product at the cost of $0.5 per unit
(ie, c=0.5) and sells it to a retaller at the wholesale price w.
The retailer, in turn, sells the product to customers at a retailer
price p. The two firms are consi ldering, a revenue sharing
contract as follows. The supplier sells the product free of charge
(i.e, w=0) to the retailer, but for each product sold, the
supplier gets 0.7p and the retailer gets 0.3p. The demand for the
product is not random, but is sensitive to price. given as
D(p)=100-50p. Assume that inventory-related costs are zero. What is
the retail price p that maximizes the retailer's own profit?
A. 0.7
B. 0.5
C. 1.5
D. 1
E. 0.3
(ie, c=0.5) and sells it to a retaller at the wholesale price w.
The retailer, in turn, sells the product to customers at a retailer
price p. The two firms are consi ldering, a revenue sharing
contract as follows. The supplier sells the product free of charge
(i.e, w=0) to the retailer, but for each product sold, the
supplier gets 0.7p and the retailer gets 0.3p. The demand for the
product is not random, but is sensitive to price. given as
D(p)=100-50p. Assume that inventory-related costs are zero. What is
the retail price p that maximizes the retailer's own profit?
A. 0.7
B. 0.5
C. 1.5
D. 1
E. 0.3