Question: A department store has identified two customer segments, one that prefers a customized suit and is willing to pay a higher price and another that

A department store has identified two customer segments, one that prefers a customized suit and is willing to pay a higher price and another that is willing to take a standardized suit but is more price sensitive. Assume that the cost of manufacturing (tailoring) either suit is $200. Demand from the customized segment has a demand curve of d1 = 20,000 - 10p1 and demand from the price-sensitive standard segment is d2 = 40,000 - 30p2.

Formulate the problem as an unconstrained capacity model.

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