A general motors executive is considering how to price the

Reference no: EM13594925

A General Motors executive is considering how to price the 2013 Chevy Volt electric car in order to maximize profits for the company. Manufacturing each Volt involves $9,500 of materials $12,500 of labor $3,800 of shipping and $4,000 of other supplies. The Detroit facility where the Volt is manufactured has $12.5 milliion of fixed costs. The marketing department says that adding a Bose sound system would boost demand, but it would cost an additional $750 per unit.

The quantity demaded at each per unit price is as follows:
Price Quantity Demanded (no Bose) Quantity Demanded (With Bose)

$29,000 14,000 16,800
$30,000 11,200 13,440
$31,000 8,960 10,752
$32,000 7,168 8,602
$33,000 5,734 6,881
$34,000 4,588 5,505
$35,000 3,670 4,404
$36,000 2,936 3,523
$37,000 2,349 2,819
$38,000 1,879 2,255
$39,000 1,503 1,804
$40,000 1,203 1,443

What profit maximizing strategy should she choose?

Reference no: EM13594925

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