Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose that 3U people live along the main street of Dinkytown (suppose they are evenly distributed). There is a single doughnut producer, Krispy Kreme, In
Suppose that 3\\\\U people live along the main street of Dinkytown (suppose they are evenly distributed). There is a single doughnut producer, Krispy Kreme, In Dinkytown and It locate as marry doughnut stands as they want wherever they want along the one-mile street. Every day each person gets a craving for one Krispy Kreme doughnut, for which he or she would be willing to pay up to $20. A person who walks the distance r to the Krispy Kreme store experiences a (round-trip) transportation cost of $fr, that is, the roundtrip transportation cost is $f per mile. Suppose that each Krispy Kreme doughnut costs the store e =$5, and that the fixed cost of having one doughnut stand is $ F. Assume that Krispy Kreme wants to serve everyone along the main street. If Krispy Kreme has ri doughnut stands, what would be Krispy Kreme's profit function as a function of t. F. and n? O II (t. F.n) = 45000 -JAX 1I (t, F, ") = 45000 [ (t, F. n) = 30000 O n (t, F.n) = 30090 O n(t, F.n) = 45000Suppose that 3000 people live along the main street of Dinkytown (suppose they are evenly distributed). There is a single doughnut producer, Krispy Kreme, in Dinkytown and it locate as many doughnut stands as they want wherever they want along the one-mile street. Every day each person gets a craving for one Krispy Kreme doughnut, for which he or she would be willing to pay up to $20. A person who walks the distance r to the Krispy Kreme store experiences a (round-trip) transportation cost of 5/r, that is, the roundtrip transportation cost is S per mile. Suppose that each Krispy Kreme doughnut costs the store c =$5, and that the fixed cost of having one doughnut stand Is $ F. Assume that Krispy Kreme wants to serve everyone along the main street. If Krispy Kreme has two doughnut stands, where should they be located and what would be Krispy Kreme's profit function as a function of t and F? ) Krispy Kreme should locate its stands at miles 0.25 and 0,75 and its profit function is II (t, F) = 30000 - 1000t - 2F Krispy Kreme should locate its stands at miles 0.25 and 0.75 and its profit function is II (t, F) = 45000 - 750t -2F Krispy Kreme should locate its stands at miles 0.25 and 0.75 and it's profit function is II (t, F) = 30000 - 7501 -2F O Krispy Kreme should locate its stands at miles 0.25 and 0.75 and its profit function is II (r, F) = 45000 - 5001 -2F Krispy Kreme should locate its stands at both ends of the main street and its profit function is II (r, F) = 45000 - 10001 - 2F
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