أنشئ حسابًا أو سجّل الدخول للانضمام إلى مجتمعك المهني.
When you accept that in your mind
maintaining the stock as [proper and achieveng the sale target every month
This is a way too broad question to answer...depends on many factors...
but a good short answer would be, when the market is saturated!
Single pricing means the same price is applied to all units even though some buyers are willing to pay more. Therefore, a lower price needed to sell just one more unit must be offered for all units.
Because the same price applies to all units sold at any given level, total revenue (TR) is equal to price times quantity sold (TR = P * Q). Here TR is represented by the blue area.
Let's plot the total revenue curve (TR). The vertical distance in the upper panel simply maps the blue area below.
When demand is price elastic (i.e., when the percentage change in quantity demanded is larger than the percentage change in price), lowering price will generate larger total revenue.
In a straight-line downward sloping demand curve, the mid-point locates the price that maximizes total revenue.
After maximum total revenue is reached, further decrease in price would lead to a decline in total revenue because the percentage change in quantity demanded is smaller than the percentage change in price.
P > MR
Since a single-price searcher will not generally lower its price beyond the maximum revenue point, we can concentrate on the rising TR segment to see how lowering price affects the marginal revenue (MR). MR is the additional revenue generated when one additional unit is sold.
Because TR is increasing at a decreasing rate, the slope of its tangents (which represents MR) decreases when more is sold at lower prices.
MR <0 after maximum total revenue point is reached and will not be shown here.
Because a lower price needed to sell just one more unit must be offered for all units,
the marginal revenue (MR) gained by the seller by lowering price is always less than the price (P) paid by the buyers (i.e., P > MR).
MR = MC
