Jeff, the manager of HiQ DVD and former president of the Guild of Graduates (UWI), seeks your expert advice. He has given you the following…

Jeff, the manager of HiQ DVD and former president of the Guild of Graduates (UWI), seeks your expert advice. He has given you the following information: when he charged a price of $10, approximately 4,000 DVD were sold, however, when the price increased by 10% the demand decreased by 1,000 units (DVD). Jeff wants to know the following (based on operating cost of $7 per DVD):

a) What is the MR? (4 MARKS) 

b) What price would maximize profit? (3 MARKS) 

c) What impact would a price decrease have on revenue? (3 MARKS) 

 
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