Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $400 per gram plus $90 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $470 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells.

Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $400 per gram plus $90 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $470 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells.

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Question

Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit
perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $400 per gram plus $90 per gram transportation costs and commission. (The
perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $470 per
gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells.
P(x) =
Calculate how much perfume should pass through his hands per day in order that he break even.
g
Interpret your answer.
O Stinky should shut down the operation.
O Stinky should buy and sell less than the break-even amount.
O Stinky should buy and sell more than the break-even amount.
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