interactions in customer evaluation Retum to the produet evaluation discussion in the text, where a potential third produet, with quantity Cb, was under eonsideration. Presuming limited market eonditions for the other produets (of ql s 2,000 and

We now assume there are no market eonstraints on the first two produets (thereby dropping the ql s 2,000 and

a] Without the noted market eonstraints, the produetion of the first two produets is affeeted by produetion of the third. Suppose 0 s cb s 2,000. Determine the best choice of ql and <12, given an exogenous cb in the noted range. (Reeall their respeetive selling prices are P1 = 600 and P2 =1,100.)

b] Now suppose the selling price of the new produet is P = 1,000 per unit. How many units must be produeed and sold if accepting this new produet is a good idea?

e] CarefuIly explain the difference between the original break-evenealculation and that you performed in [b] above.

d] Suppose cb = 800 units. What is the minimum price for this to be an interesting produet?

e] Again presurning 0 s cb s 2,000, what is the ineremental eost of the third produet?

AppendixLO1