You are the meat manager for a large grocery chain and need to set the retail price for the next month of the data (month 56). If the wholesale price of rib eye steak is $4.00 per pound, the price of chicken is $1.70 per pound, and disposable income is at the mean, what is the optimal price of rib eye steaks?

 
 
 
 
 
 

Impressive! You correctly determined that the optimal rib eye price is $9.23 per pound. If you are still not sure that you understand the calculations, be sure to review the “Step-by-Step Guide: Price Optimization Considering Demand” in the Resources and the “Price Optimization Considering Demand” video.