Marketing Analytics Question
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4.xlsxEx. 4
| price | demand |
| 5 | 6 |
| 5.05 | 5.88 |
| unit cost | $ 2.00 |
| blades per razor | 50 |
| profit per blade | $ 0.15 |
| price | $ 1.00 |
| demand | 15.6000000375 |
| profit | $ 101.40 |
| Blade Unit Cost | 0.2 |
| Blade Price | 0.35 |
| Price Elasticity | 2 |
| Best Price for Blade | 53687092.2 |
| Blade Profit | 2684354600 |
| Best Price for Razor | 214748368.8 |
| Razor Profit | 3350074530.13306 |
In the Razorsandblades.xls file example, suppose the cost to produce a blade is .20. If you charge .35 for a blade, a customer buys an average of 50 blades from you. Assume the price elasticity of demand for blades is 3. What price should you charge for a razor and for a blade?
