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.
(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) |
- 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:
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