Question

MegaSports, Inc. produces two high-priced metal baseball bats, the Slugger and the Launcher, that are made from special aluminum and steel alloys. The cost to produce a Slugger bat is $100, and the cost to produce a Launcher bat is $120. We cannot assume that MegaSports will sell all the bats it can produce. As the selling price of each bat model—Slugger and Launcher—increases, the quantity demanded for each model goes down.

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Assume that the demand, S, for Slugger bats is given by S = 640 − 4PS and the demand, L, for Launcher bats is given by L = 450 − 3 PL where PS is the price of a Slugger bat and PL is the price of a Launcher bat. MegaSports manufactures as many bats as there is demand for at the price it charges for them.

Q3: (2pts) What are the optimal number of Slugger bats and Launcher bats manufactured if there is no constraint and you want to maximize profit?

Answer 1