But this is, of course, an optimistic scenario. Let's think of other scenarios.

So let's say it's 1.05.

The new model will retail for 30,000 yen.

Well, I won't define the vehicle for you, but I will define the cost for you.

So over here let me draw a better graph than that.

Cost of goods sold, well that's just the cost of the goods sold.

Notice that the selling price is written in red.

Then again for your revenue stream.

Sell, sell, sell.

Over here, this axis right here is going to be the selling price,

But it's also a morally important one.

It's a fantastic device that we want to get in the hands of as many people as we can.

So if the sale is twenty five percent off of x, we could say that the new price, the sale price will be x minus twenty five percent of x is equal to the sale price.

This is telling us that if the selling price increases, then this will become a larger negative number so we're going to sell fewer, we're gonna sell a smaller quantity.

So what, how can we figure out how to maximize this profit?

So, let's say, I cut prices below Imran because I realize this increase price strategy was kind of silly.

Or if we just wanted to round to the nearest penny, since we're talking about selling something, this optimal profit, this optimal profit, will happen at a selling price of 23 and 30, 23 and 33 cents.

They want to encourage high volume purchases, and so they have stepped pricing that is oriented to create volume.

We get 30 s squared plus 1400 s minus 16000.

Un bundling is just a fancy word for saying can I somehow decompose the product into separate pieces, giving some for free or if you're lucky, charging for everyone of them.

Let's say this was for 2008.

I love Lego Mindstorm, is which a wonderful way to experiment with these things.

What do you sell?

So it turns out that those fuels and technologies exist, and this is an example of that this is a solar LED light bulb that we sell for a retail price of about 10 dollars in rural Haiti.

And they'll essentially come up with some price, which is essentially as high a price as they want do a high price because obviously as a company,

Now the East India Company would sell the surplus tea directly through hand picked consignees in America.

And at first, maybe in 2008, they all say, you know what, this is temporary, that was just a fire sale price, and these auctions don't really reflect a market reality.

So it makes sense for me to see if there's any maybe there's some people who want cupcakes, who can't get them because I can't produce that many.

As you can see, roughly speaking, as the size of the house goes up, so does the sales price.

And their value proposition, as even they realized later, was pretty unclear.

Sold

PHOTO RELEASE

My dad sells tractors.

And let's be very clear what this is telling us.

So in the last one, I touched on a little bit that the real lever that I, as the owner of my cupcake factory, can change is price.

It graphs the size of the house in square feet to the sales price in thousands of dollars.

We call it a select opportunity .

Suppose marketing experts have determined the relationship between the selling price of an item and the cost of an item can be represented by the linear equation q 30s 800, where q is the quantity sold in a year and s is the selling price.

This is the PC guy over here.

Then auctions like eBay are another example of dynamic pricing.

Our liquor license!

What's so awesome about a queensize futon sale?

This guy is a Bible salesman.

So if we substitute 30 s plus 800 for q, we get 30 s plus 800 times s minus 20, times, and this is in a different shade of yellow, times s minus 20.

There's a company called Apex, a no name Chinese firm, who has, several times in the past year, been the number one