The Radio Shop sells two popular models of portable sports radios: model A and model B. The sales of these products are not independent of each other (in economics, we call these substitutable products, because if the price of one increase, sales of the other will increase). The store wishes to establish a pricing policy to maximize revenue from the products. A study of price and sales data shows the following relationships between the quantity sold (N) and prices (P) of each model (i.e. PA → Price of model A, NA → Number of model A sold, etc.):

NA = 195 – 0.5PA + 0.35PB

NB = 30.0 + 0.06PA – 0.5PB

1. a) Construct a model for the total revenue (total price*quantity sold) and implement it on a.

2. b) Develop a two-way data table to estimate the optimal prices for each product to maximize total revenue.

3. c) Use Solver to find the optimal prices. spreadsheet.