This is a really good example of a business solution that is quite counter intuitive. I will suggest this video for any economics or business school students.
You can also use the formula p*= (A+Bc)/(2B) where A is the intercept (15,000 in the example) and B is the trend (133.33). That is p*= (15,000 + 133.33*59)/(2*133.33) = 85.75
you optimise Total Profit cos after transformations you get a QUADRATIC function which as a curve has a max point. If you study economic course then definitely read *_Managerial Economics_* by Samuelson, Marks. There is a whole chapter about that kind of optimisation calcs using demand curve.
thank you so much, this made it very clear to me -need an equation linking to your quantity and cost for the objective -having costs set as changing variable
I sugest complementing this with a video of simple linear regression and efficient frontier. you will picture in your head what the solver function is doing
Efficient frontier? Are you implying a "short sell" on printers and "longing" the cartridges? That is a weird way to visualise this. I understand it as simply picking a point on the line that results in the biggest squared area in the chart from that point to (0,0).
start from y = ax + b Y = B - Ap ; p-price, a,b-coefficients cos it's linear model and higher price causes a decrease in demand. Use at least two points (price,quantity) but in real cases you may need more data to see some pattern.
hi, this may be 1 year later, I think the reason is the formula at 6:30. if you enter 15000-133.3*B7, instead of 15000-133.33*B7 (note the decimal places), you would get 525, 112.42
