Ashley Furniture hires you as consultants to help them sell their new coffee table. Through a customer survey, with the price of each coffee table at $220, a total of 110 coffee tables would be sold at their La Crosse location. The same survey said that if the price of each table was $160, a total of 130 tables would be sold. In order to make a new table, the company knows that it will have to buy (once and only once) $3000 of equipment. After that, each individual table will cost $90 to make. (a) Find the price-demand equation, assuming a linear model, with p for price and r for the number of tables. 23,08 42-857 (b) How many tables should the company make to break even? (c) How many tables should the company make to maximize their revenue? (d) How many tables should the company make to maximize their profit?
Ashley Furniture hires you as consultants to help them sell their new coffee table. Through a customer survey, with the price of each coffee table at $220, a total of 110 coffee tables would be sold at their La Crosse location. The same survey said that if the price of each table was $160, a total of 130 tables would be sold. In order to make a new table, the company knows that it will have to buy (once and only once) $3000 of equipment. After that, each individual table will cost $90 to make. (a) Find the price-demand equation, assuming a linear model, with p for price and r for the number of tables. 23,08 42-857 (b) How many tables should the company make to break even? (c) How many tables should the company make to maximize their revenue? (d) How many tables should the company make to maximize their profit?
Chapter14: Monopolistic Competition And Product Differentiation
Section: Chapter Questions
Problem 15P
Related questions
Question
Solve for Question (C) How to Maximize Revenue
![1. Ashley Furniture hires you as consultants to help them sell their new coffee table.
Through a customer survey, with the price of each coffee table at $220, a total of 110
coffee tables would be sold at their La Crosse location. The same survey said that if
the price of each table was $160, a total of 130 tables would be sold. In order to make
a new table, the company knows that it will have to buy (once and only once) $3000
of equipment. After that, each individual table will cost $90 to make.
(a) Find the price-demand equation, assuming a linear model, with p for price and r
for the number of tables.
2 2,08
42-857-
(b) How many tables should the company make to break even?
c How many tables should the company make to maximize their revenue?
(d) How many tables should the company make to maximize their profit?
(e) What should be the price of each table for Ashley Furniture to maximize their
profit?
(f) Based on the price n the previous step (the price per table which maximizes the
company's profit), you decide to deposit $200 into a saving account which has an
annual rate of 3% and interest compound monthly. How long will you have to
wait until the account has enough money for you to buy one of these tables?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7c2e5282-4959-4728-a47d-aee84c34706e%2Fd7fe5d7a-a5b5-4eea-832d-44e1a5d66727%2Fe23l4msj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Ashley Furniture hires you as consultants to help them sell their new coffee table.
Through a customer survey, with the price of each coffee table at $220, a total of 110
coffee tables would be sold at their La Crosse location. The same survey said that if
the price of each table was $160, a total of 130 tables would be sold. In order to make
a new table, the company knows that it will have to buy (once and only once) $3000
of equipment. After that, each individual table will cost $90 to make.
(a) Find the price-demand equation, assuming a linear model, with p for price and r
for the number of tables.
2 2,08
42-857-
(b) How many tables should the company make to break even?
c How many tables should the company make to maximize their revenue?
(d) How many tables should the company make to maximize their profit?
(e) What should be the price of each table for Ashley Furniture to maximize their
profit?
(f) Based on the price n the previous step (the price per table which maximizes the
company's profit), you decide to deposit $200 into a saving account which has an
annual rate of 3% and interest compound monthly. How long will you have to
wait until the account has enough money for you to buy one of these tables?
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