A department store is yet to determine the price of the swimsuits to maximize their profit during the summer sales season. The season lasts three months and the store manager forecasts that customers buying early in the season are likely to be less price sensitive and those buying later in the season are likely to be more price sensitive. The demand curves in each of the three months are forecast to be as follows: d1=2,000 - 10p1, d2= 2,000 – 20p2, and d3= 2,000 – 30p3. The store doesn’t have any inventory at the beginning of the season.
Assume the store wants to charge the same price over the entire season. Find the single price which maximizes overall revenue. How many swimsuits the department store need to purchase at the beginning of the season?
If each swimsuit costs $40, what is the single price the department store should charge to maximized overall profit (profit = revenue-cost)? How many swimsuits the department store need to purchase at the beginning of the season?
What is the profit in difference between the decisions made in a and b with each swimsuit costs $40?
If each swimsuit costs $40 and the store wants dynamic prices that vary by month, how many swimsuits should it purchase at the beginning of the season? What is the profit obtained?