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 =
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, Ps is the selling price of the Sky Eagle, DH is the demand for the Horizon and PH is the selling price of the Horizon):
Ds = 215 - 0.5 Ps + 0.15 PH
DH = 260 + 0.2 Ps - 0.45 PH
The store wishes to determine the selling price that maximizes revenue for these two products. Select the revenue function for these two models. Choose the correct answer below.
(i) | Ps Ds + PHDH = PH(260 - 0.2 Ps - 0.45 PH) + Ps(215 - 0.5 Ps + 0.15 PH) |
(ii) | Ps Ds - PH DH = Ps(215 - 0.5 Ps + 0.15 PH) - PH(260 - 0.2 Ps - 0.45 PH) |
(iii) | Ps Ds + PH DH = Ps(215 - 0.5 Ps + 0.15 PH) + PH(260 + 0.2 Ps - 0.45 PH) |
(iv) | Ps Ds - PH DH = Ps(215 + 0.5 Ps + 0.15 PH) - PH(260 - 0.2 Ps - 0.45 PH) |
- Select your answer -Option (i)Option (ii)Option (iii)Option (iv)Item 1
Find the prices that maximize revenue.
Do not round intermediate calculations. If required, round your answers to two decimal places.
Optimal Solution:
Selling price of the Sky Eagle (Ps): $
Selling price of the Horizon (PH): $
Total Revenue: $
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