Solution:-
Midsized automobile price:-
Midsized automobile price can be calculated as follows:-
Price = Marginal Cost (3 * Elasticity) / 1 + (3 * Elasticity)
= $14,000 (3 * -1.2) / 1 + (3 * -1.2)
= $14,000 * -3.6 / -2.6
= $14,000 * 1.384615
= $19,384.61
Hence, the value of price should charge for a midsized automobile is $19,384.61
The price that should be charge for a midsized automobile if you expect to maintain your record sales is $15,230.77.
Using this formula
Midsized automobile price = Marginal Cost (3×Elasticity) / 1 + (3 × Elasticity)
Let plug in the formula
Midsized automobile price = $11,000 (3× -1.2) / 1 + (3× -1.2)
Midsized automobile price = $14,000 × -4.8/ -3.8
Midsized automobile price = $14,000 × 1.384615
Midsized automobile price = $15,230.765
Midsized automobile price =$15,230.77 (Approximately)
Inconclusion the price that should be charge for a midsized automobile if you expect to maintain your record sales is $15,230.77.
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