The Indian mobile phone company Micromax is in trouble. The hire you as a consultant to help them decide the optimal price of their newest product. You find that the inverse demand function for the market is p(x)=500-0.1x, where x is the number of units of the product sold. The engineering team at Micromax tell you that that the cost of production depends on the volume of production (x) and includes a fixed part 1,00,000 and a variable part 100x. What price will you recommend to the Micromax management.
Answers
Step-by-step explanation:
After being the second biggest player in the Indian mobile technology companies, is it in the verge of being an extinct brand?
From a customers perspective, they failed to introduce products in the market.
Micromax was doing great, its products were the best value for money, there was a time when a mobile handset got sold out in a few minutes, sound familiar?
It was the nascent stage of Xiaomi entering the market, it was bogged down by not being available at stores, and only at flash sales. People were apprehensive, this is when they should have worked harder as a competition. Although the products of each company were similarly priced, Xiaomi started becoming popular, because of the amount of handsets, and Micromax not really producing new stuff.
That mistake cost them dearly, now micromax isn’t what it used to be, there was a time when Micromax made fun of Samsung whose phones were so expensive that they had to be gotten on EMI’s, and now it placed too much faith on its customers, and underestimated the competition, the result being obvious.