A farmer in the magical land of Avalon is raising a unicorn to sell to a band of Jewel Riders. The market price for unicorn is $12 per pound, but is falling 10 cents per day. The rapidly growing unicorn is currently weighing 400 pounds and is expected to gain 5 pounds per day for the next two to three weeks. The costs to raise a typical unicorn are $5 per day plus $100 for a special unicorn harness and feedbag. What is the optimal time to sell the unicorn to the Jewel Riders? P(x)= -.5x2+15x+4700 P'(x)= -x+15 p"(x)= -1 < 0 SENSITIVITY ANALYSIS: (This is the part I am a bit uncertain about. The questions below.) Any help is much appreciated. 1. Preform a sensitivity analysis of the optimal time to sell versus the variable cost to raise a unicorn (harness still $100). 2. So if the actual variable cost was $4.00 per day instead of $5.00 (20% decrease), what would you estimate for the best time to sell based on your sensitivity results? 3. Finally, substitute $4.00 for the variable cost into your previous profit function and find the optimal time to sell.
A farmer in the magical land of Avalon is raising a unicorn to sell to a band of Jewel Riders. The market price for unicorn is $12 per pound, but is falling 10 cents per day. The rapidly growing unicorn is currently weighing 400 pounds and is expected to gain 5 pounds per day for the next two to three weeks. The costs to raise a typical unicorn are $5 per day plus $100 for a special unicorn harness and feedbag. What is the optimal time to sell the unicorn to the Jewel Riders?
P(x)= -.5x2+15x+4700
P'(x)= -x+15
p"(x)= -1 < 0
SENSITIVITY ANALYSIS: (This is the part I am a bit uncertain about. The questions below.) Any help is much appreciated.
1. Preform a sensitivity analysis of the optimal time to sell versus the variable cost to raise a unicorn (harness still $100).
2. So if the actual variable cost was $4.00 per day instead of $5.00 (20% decrease), what would you estimate for the best time to sell based on your sensitivity results?
3. Finally, substitute $4.00 for the variable cost into your previous profit function and find the optimal time to sell.
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