should try best to keep the position in market during the mature period of the product lifecycle even

though the revenue can be earned is limited in this period. Once 2 Weelz can get pass this period successfully, in the next phrase which is the decline period, the competitors may much less; and the more profits can be earned at that time. To achieve the stability and success in market during different period of lifecycle, several measures are needed to be done. Firstly, from the Table 1 we can find that, based on the elasticity, if 2 Weelz keeps to producing all products demanded by consumers, the cash flow of 2 Weelz wll broken, which means that the revenue cannot cover any costs of producing. Moreover, considering the bicycle of 2 Weelz is in the mature phrase, so, it is impossible to raise the price. In this case, the only can be done to cut the costs of producing is reducing the outputs which mean that providing the bicycles less than the quantity demanded in the markets. Then we need to calculate the number of the bicycles 2 Weelz should produce. That is, Total Cost=Revenue, in other words, 446.667Q+260=PQ; using the 200 to substitute P, we can get 446.667Q+260=200Q. Solution is Q=

When the elasticity is 0.06667, the price is about 200. Therefore, in long run, the first thing should be done is to find the breakeven point here to ensure 2 Weelz can gain the enough revenue to cover the costs. Figure 4 (horizontal axis=total costs; vertical axis=demand quantity)

Different from the requirement in short run, in long run, to ensure that 2 Weelz can continue in business, the total revenue should cover all costs including the fixed and variable parts. That is, Total revenue=Total cost. Thus, we need to find the point of intersection of lines refers to the Total Revenue and Total costs in Figure 4.

Thus, according to the formula above, we also can get PQ=WL+ Rent+Other Capital Costs. Using the given data to substitute them, we can get: (1789.4-29.175Q)Q=446.358Q+202+58. Solution is Q=0.194 or 45.84; using these figures of Q to substitute P=1789.4-29.175, P=1783.74 or 452.02. Therefore, in theory, in long run, there are two break even points here which are 0.194 and 45.84. However, only caring about the balance of payments is not enough. 2 Weelz also need to focus on the profitability. Considering the product life cycle of bicycles, we can know that, for the product in the decline phase, the demands are much fewer than before. That is, the product is facing elimination. For the moment, the existing companies would prepare to invest finance to develop new products to meet the consumers` demand. On these bases, if conditions allow, 2 Weelz should try the best to make profits to support the new products development in the market in decline. As the calculated result above, maximum profits can be achieved is 15196.1; and at this level, price is 1117.792 and quantity is 23.02. Thus, 2 Weelz should raise the price of the bicycles now from 200 to 1117.92, and reduce the quantity demanded from about 55 to 23 to earn profits as many as possible.