Question: 1 . Using the formulas given in equations ( 1 2 . 8 ) and ( 1 2 . 9 ) , develop an expression
Using the formulas given in equations and develop an expression for the total profit contribution as a function of the price of cars and the price of light trucks. Assume the marginal cost for passenger cars is and the marginal cost forlight trucks is Using Excel Solver or LINGO, find the price for each car so that the total profitcontribution is maximized. Given the prices determined in Question calculate the number of passenger carssold and the number of light trucks sold. Duplicate the spreadsheet in Figure Your spreadsheet should have formulas in cells D:D and B and be able to calculate the harmonic CAFE average forany MPG rating and any number of vehicles in each category. Again, assuming that passenger cars get MPG and light trucks get MPGcalculate the CAFE average for the fleet size from Question If you do the calculation in Question correctly, the CAFE average of the fleet is Add a constraint that the fleet average must be MPG and resolve the modelto get the maximum total profit contribution subject to meeting the CAFE constraint.
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