Question 1

Section B - Case 2: CyberShield

CyberShield is a tech startup developing a new B2B SaaS (Software as a Service) platform for cybersecurity.

The company wants to find the profit-maximizing price. The demand equation is P = 200 - 0.02Q. The marginal cost (MC) of adding a new user is constant at $20 per month.

What is the optimum selling price to maximize profit?

Accepted Answer

1. Find Marginal Revenue (MR) equation: MR = a - 2bQ. 2. Set MR = Marginal Cost (MC). 3. Solve for Q. 4. Substitute Q back into the demand equation (P = a - bQ) to find P.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Setting P = MC instead of MR = MC, or forgetting to substitute Q back into the price equation.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 3

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