You invent a new pet care product – a rubber mat that keeps dogs from flying off the center console when their owner hits the br
akes. You successfully file for a patent and bring the product to market. You can get as many of the units produced as you’d like at a cost of $8 each. In other words, the cost function is given by ????(????) = ????????. You pay for a market research firm to estimate the market demand for your product. The econometricians there estimate that the demand for your product is given by ???? = ????, ???????????? − ????????. Your partner says that demand seems really high, and suggests that you charge $75 per unit. You aced managerial economics but your partner didn’t – you are skeptical that she is guessing at a price and not maximizing profits.
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