Respuesta :
The price of the company must be $200 in order to maximize the profits.
What is Demand Curve?
Demand curve refers to the graphical presentation of the demand and the prices of the commodity. It shows the relationship between the price and the quantity of the product.
According to the given question, company sells the 10000 units at $200 per unit therefore the total cost of the company is as follows:-
Total Cost = total units produced * price per unit
= 10000*200
= $2000000
But the production of 20,000 units if it reduces the price to $75 thus the production is
= 20000*75
= $1500000
Thus new product is sold at the loss. According to the question 10000 units production can lead to prices per unit at $200 whereas the production of 20000 units should be at the price of $200.
Therefore in order to Maximize the profits, price of the new product must always be $200.
Learn more about demand curve here:
https://brainly.com/question/5217258
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