It is estimated that a grocer’s daily profit from the sale of two brands of cherry juice is given by the function: P(x,y) = (x - 30)(70 - 5x + 4y) + (y – 40)(80 + 6x – 7y) cents where x is the price per can of Brand V Juice and y is the price per can of Brand Triple V Juice. Currently Brand V Juice sells for 50 cents per can and Brand Triple V Juice sells for 52 cents per can. i. Use marginal analysis to estimate the change in the daily profit that will result if the grocer raises the price of Brand Triple V by one cent per can while keeping the price of Brand V unchanged. ii. Find a stationary point of the daily profit function. Classify this stationary point.
It is estimated that a grocer’s daily profit from the sale of two brands of cherry juice is given by the function: P(x,y) = (x - 30)(70 - 5x + 4y) + (y – 40)(80 + 6x – 7y) cents where x is the price per can of Brand V Juice and y is the price per can of Brand Triple V Juice. Currently Brand V Juice sells for 50 cents per can and Brand Triple V Juice sells for 52 cents per can. i. Use marginal analysis to estimate the change in the daily profit that will result if the grocer raises the price of Brand Triple V by one cent per can while keeping the price of Brand V unchanged. ii. Find a stationary point of the daily profit function. Classify this stationary point.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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It is estimated that a grocer’s daily profit from the sale of two brands of cherry juice is given by the
function:
P(x,y) = (x - 30)(70 - 5x + 4y) + (y – 40)(80 + 6x – 7y) cents
where x is the price per can of Brand V Juice and y is the price per can of Brand Triple V Juice. Currently
Brand V Juice sells for 50 cents per can and Brand Triple V Juice sells for 52 cents per can.
i. Use marginal analysis to estimate the change in the daily profit that will result if the grocer raises the
price of Brand Triple V by one cent per can while keeping the price of Brand V unchanged.
ii. Find a stationary point of the daily profit function. Classify this stationary point.
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