Suppose Ford currently sells 250000 Ford mustang's annually.  The unit cost of a mustang including the delivery cost to a dealer is $16000 . The current mustang price is $20000 and the current elasticity of demand for the mustang is -1.5. A.  Determine a profit maximizing price for a mustang. Do this when the demand function is of the constant elasticity type. Do it when the demand function is linear

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter3: Demand Analysis
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Suppose Ford currently sells 250000 Ford mustang's annually.  The unit cost of a mustang including the delivery cost to a dealer is $16000 . The current mustang price is $20000 and the current elasticity of demand for the mustang is -1.5.

A.  Determine a profit maximizing price for a mustang. Do this when the demand function is of the constant elasticity type. Do it when the demand function is linear 

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