Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Mary Annette's Puppet Shop spends $10,000 per month on internet advertising to sell its toys. Google costs $.50 per click, Yahoo, $.30 per click, and
Mary Annette's Puppet Shop spends $10,000 per month on internet advertising to sell its toys. Google costs $.50 per click, Yahoo, $.30 per click, and Facebook, $.40 per click. The CEO wants to make sure the company spends at least 25% of its budget on each vendor. Each click on Google yields $3 in profit, Yahoo, $2, Facebook, $1. The Shop must sign a contract specifying the maximum number of clicks it will buy per month. What is the maximum number of clicks it should buy from each vendor to maximize its profits? (Hint: If X1 = clicks on Google, X2 = clicks on Yahoo, X3 = clicks on Facebook, then the constraint for Google is shown below. You can see a similar sort of constraint in the KT Media Mix problem #8 in the Lecture Notes.) | |||||||
Hint on Google constraint: | |||||||
Dollars Spent on Google: | Total Dollars spent overall: | ||||||
$.50*X1 | >=.25($.50X1+$.30X2+$.40*X3) | becomes | |||||
0.375 | -0.075 | -0.1 | >= | 0 | |||
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