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 = 198 -0.5PA + 0.25PB NB = 305 + 0.07PA - 0.6PB Construct a model for the total revenue and implement it on a spreadsheet. Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in increments of $10. Max profit occurs at Camera A price of $ Max profit occurs at Camera B price of $
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 = 198 -0.5PA + 0.25PB NB = 305 + 0.07PA - 0.6PB Construct a model for the total revenue and implement it on a spreadsheet. Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in increments of $10. Max profit occurs at Camera A price of $ Max profit occurs at Camera B price of $
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.13P
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Transcribed Image Text: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 = 198 -0.5PA + 0.25PB
NB = 305 + 0.07PA - 0.6PB
Construct a model for the total revenue and implement it on a spreadsheet. Develop a
two-way data table to estimate the optimal prices for each product in order to maximize
the total revenue. Vary each price from $250 to $500 in increments of $10.
Max profit occurs at Camera A price of $
Max profit occurs at Camera B price of $
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