In the peak-load pricing model in Example 7.4, the demand functions have positive and negative coefficients of prices. The negative coefficients indicate that as the price of a product increases, demand for that product decreases. The positive coefficients indicate that as the price of a product increases, demand for the other product increases.

a. Increase the magnitudes of the negative coefficients from 0.5 and 1 to 0.7 and 1.2, and then rerun Solver. Do the changes in the optimal solution go in the direction you would expect? Explain.

b. Increase the magnitudes of the positive coefficients from 0.1 and 0.1 to 0.3 and 0.3, and then rerun Solver. Do the changes in the optimal solution go in the direction you would expect? Explain.

c. Make the changes in parts a and b simultaneously, and then rerun Solver. What happens now?
Skill-Extending Problems