(a) A necklace start-up makes profit, , in dollars according to the following function of the...
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(a) A necklace start-up makes profit, , in dollars according to the following function of the number of necklaces, q, that they sell: = 120g - 2q². What is the optimal number of necklaces for this firm to sell, to make the most profit? (b) Suppose the same firm realizes they must pay 8 dollars to ship every necklace to their customers; how many necklaces should they now decide to sell (assuming they cannot change their prices)? (c) Now imagine that the same firm finds out they owe the government 5000 dollars in overdue taxes (and they must still pay for shipping their necklaces). How many neck- laces is it now best for them to sell? (d) Compare your answers between part b and part c. Explain why you get your answer to e, based on your knowledge of derivatives and what they represent graphically. (a) A necklace start-up makes profit, , in dollars according to the following function of the number of necklaces, q, that they sell: = 120g - 2q². What is the optimal number of necklaces for this firm to sell, to make the most profit? (b) Suppose the same firm realizes they must pay 8 dollars to ship every necklace to their customers; how many necklaces should they now decide to sell (assuming they cannot change their prices)? (c) Now imagine that the same firm finds out they owe the government 5000 dollars in overdue taxes (and they must still pay for shipping their necklaces). How many neck- laces is it now best for them to sell? (d) Compare your answers between part b and part c. Explain why you get your answer to e, based on your knowledge of derivatives and what they represent graphically.
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a To find the optimal number of necklaces for the firm to sell and maximize profit we need to maximi... View the full answer
Related Book For
Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
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