Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Camera Shop sells two popular models of digital SLR cameras (Camera A Price: 200, Camera B Price: 300). The sales of these products are

The Camera Shop sells two popular models of digital SLR cameras (Camera A Price: 200, Camera B Price: 300). The sales of these products are not independent of each other, but rather if the price of one increase, the sales of the other will increase. In economics, these two camera models are called substitutable products. The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and prices (P) of each model: NA = 195 - 0.6PA + 0.25PB NB = 301 + 0.08PA - 0.5PB

Construct a model for the total revenue and implement it on a spreadsheet. What is the total revenue from selling the two products based on the current prices?

$

Assume that product A price is kept at $200. Develop a data table to estimate the optimal price for product B in order to maximize the total revenue. Vary the price of product B from $250 to $500 in increments of $10. Max revenue occurs at Camera B price of $ The maximum revenue obtained with the above price of Camera B would be $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Auditing An Introduction to International Standards on Auditing

Authors: Rick Hayes, Philip Wallage, Hans Gortemaker

3rd edition

273768174, 978-0273768173

More Books

Students also viewed these Accounting questions

Question

What are the dos of a group discussion? Section B

Answered: 1 week ago

Question

Did you add the logo at correct size and proportion?

Answered: 1 week ago