Question: Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two cameras are as follows ( D S =
Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two cameras are as follows (DS = demand for the Sky Eagle, Ps is the selling price of the Sky Eagle, DH is the demand for the Horizon and PH is the selling price of the Horizon):
Ds = 225 - 0.6 Ps + 0.3 PH
DH = 270 + 0.1 Ps - 0.58 PH
The store wishes to determine the selling price that maximizes revenue for these two products. Select the revenue function for these two models. Choose the correct answer below.
| (i) | Ps Ds + PHDH = PH(270 - 0.1 Ps - 0.58 PH) + Ps(225 - 0.6 Ps + 0.3 PH) |
| (ii) | Ps Ds - PH DH = Ps(225 - 0.6 Ps + 0.3 PH) - PH(270 - 0.1 Ps - 0.58 PH) |
| (iii) | Ps Ds + PH DH = Ps(225 - 0.6 Ps + 0.3 PH) + PH(270 + 0.1 Ps - 0.58 PH) |
| (iv) | Ps Ds - PH DH = Ps(225 + 0.6 Ps + 0.3 PH) - PH(270 - 0.1 Ps - 0.58 PH) |
Find the prices that maximize revenue.
Do not round intermediate calculations. If required, round your answers to two decimal places.
Optimal Solution:
Selling price of the Sky Eagle (Ps): $
Selling price of the Horizon (PH): $
Total Revenue: $
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