Economics

Sales maximization-allocation Company has $60 thousand to spend on the development x and the marketing y of a new product (where x and y measure development and marketing spending in thousand $). It is estimated, that with x spend for development and y for marketing S products will be sold: 58. S(z, y) = 20ray How much should be spend on marketing, how much on product development and how many units of the product will be sold? How much products will be sold, if the company decides to spend $61th on the new product? Solution: Start with L(K, y.2) = 20xay + a(60 -x-y) Optimal bundle X= 36, y 24