Jim\'s Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The de

Question

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 = 230 - 0.5PS + 0.38PH

DH = 260 + 0.1Ps - 0.62PH

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.

- 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: $

(i) PsDs + PHDH = PH(260 - 0.1Ps - 0.62PH) + Ps(230 - 0.5Ps + 0.38PH) (ii) PsDs - PHDH = Ps(230 - 0.5Ps + 0.38PH) - PH(260 - 0.1Ps - 0.62PH) (iii) PsDs + PHDH = Ps(230 - 0.5Ps + 0.38PH) + PH(260 + 0.1Ps - 0.62PH) (iv) PsDs - PHDH = Ps(230 + 0.5Ps + 0.38PH) - PH(260 - 0.1Ps - 0.62PH)

Explanation / Answer

Ds = 230 - 0.5PS + 0.38PH

DH = 260 + 0.1Ps - 0.62PH

PsDs = Ps(230 - 0.5Ps + 0.38PH)

PHDH = PH((260 + 0.1Ps - 0.62PH)

Total revenue = Price x Quantity

Revenue function for both the models =

PsDs + PHDH = Ps(230 - 0.5Ps + 0.38PH) + PH(260 + 0.1Ps - 0.62PH)

Therefore, right option is - Option iii

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.