Answered step by step
Verified Expert Solution
Question
1 Approved Answer
An electronics store sells two popular models of wireless headphones, model A and model B. The sales of these products are not independent of each
An electronics store sells two popular models of wireless headphones, 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 increases, sales of the other will increase). The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and prices (P) of each model: NA = 22 -0.68PA + 0.22PB NB = 34 +0.11PA -0.62PB Develop a spreadsheet for calculating the total revenue if PA = $20 and Pp = $34. Design it so that the price-demand function parameters can easily be changed. Complete the spreadsheet below. (Type integers or decimals. Round the quantities to the nearest integer as needed. Do not include the $ symbol in your answers.) A B C D E F G 1 Model Parameters for QTY Sold Model Price Constant Coeff Price A Coeff Price B Quantity Sold Revenue IN A 5 Total RevenueA garage band wants to hold a concert. The expected crowd is 2,500. The average expenditure on concessions is $30. Tickets sell for $25 each, and the band's profit is 85% of the gate and concession sales minus a fixed cost of $20,000. Develop a mathematical model and implement it on a spreadsheet to find the band's expected profit. Write Excel formulas for the unknown values in the model. A B C 1 Expected Crowd 2 Average Concessions Expenditure 3 Fixed Cost 4 Ticket Price 5 Profit percentage 6 Ticket Revenue Concession Revenue Profit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started