Question
Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two cameras are as follows (D S = demand
Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two cameras are as follows (DS= demand for the Sky Eagle,Psis the selling price of the Sky Eagle,DHis the demand for the Horizon andPHis the selling price of the Horizon):
Ds= 220 - 0.5PS+ 0.25PH
DH= 275 + 0.2Ps- 0.58PH
The store wishes to determine the selling price that maximizes revenue for these two products. Develop the revenue function for these two models. Choose the correct answer below.
(i) | PsDs+PHDH=PH(275 - 0.2Ps- 0.58PH) +Ps(220 - 0.5Ps+ 0.25PH) |
(ii) | PsDs-PHDH=Ps(220 - 0.5Ps+ 0.25PH) -PH(275 - 0.2Ps- 0.58PH) |
(iii) | PsDs+PHDH=Ps(220 - 0.5Ps+ 0.25PH) +PH(275 + 0.2Ps- 0.58PH) |
(iv) | PsDs-PHDH=Ps(220 + 0.5Ps+ 0.25PH) -PH(275 - 0.2Ps- 0.58PH) |
- Select your answer -Option (i)Option (ii)Option (iii)Option (iv)Item 1
Find the prices that maximize revenue.
If required, round your answers to two decimal places.
Optimal Solution:
Selling price of the Sky Eagle (Ps): $
Selling price of the Horizon (PH): $
Revenue: $
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