lim'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 sellin OH 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
lim'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 sellin OH 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
Chapter1: Making Economics Decisions
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![**Problem 14-05 Algo (A Production Application: Par, Inc. Revisited)**
Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two cameras is as follows (\( D_S \) = demand for the Sky Eagle, \( P_S \) is the selling price of the Sky Eagle, \( D_H \) is the demand for the Horizon and \( P_H \) is the selling price of the Horizon):
\[
D_S = 225 - 0.6 P_S + 0.3 P_H
\]
\[
D_H = 270 + 0.1 P_S - 0.58 P_H
\]
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) \( P_S D_S + P_H D_H = P_H (270 - 0.1 P_S - 0.58 P_H) + P_S (225 - 0.6 P_S + 0.3 P_H) \)
(ii) \( P_S D_S + P_H D_H = P_S (225 - 0.6 P_S + 0.3 P_H) + P_H (270 - 0.1 P_S - 0.58 P_H) \)
(iii) \( P_S D_S - P_H D_H = P_S (225 - 0.6 P_S + 0.3 P_H) + P_H (270 - 0.1 P_S - 0.58 P_H) \)
(iv) \( P_S D_S - P_H D_H = P_S (225 + 0.6 P_S + 0.3 P_H) - P_H (270 - 0.1 P_S - 0.58 P_H) \)
**Select your answer:**
*Drop-down selection box*
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 (\( P_S \)): $____
Selling price of the Horizon (\( P_H \)): $____
Total Revenue: $____](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb894e8fe-1c5c-40b2-9b0c-b397d4783847%2F29263dab-a50f-48c8-a329-75e5fd4d366c%2Fxdaybdv_processed.png&w=3840&q=75)
Transcribed Image Text:**Problem 14-05 Algo (A Production Application: Par, Inc. Revisited)**
Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demand for these two cameras is as follows (\( D_S \) = demand for the Sky Eagle, \( P_S \) is the selling price of the Sky Eagle, \( D_H \) is the demand for the Horizon and \( P_H \) is the selling price of the Horizon):
\[
D_S = 225 - 0.6 P_S + 0.3 P_H
\]
\[
D_H = 270 + 0.1 P_S - 0.58 P_H
\]
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) \( P_S D_S + P_H D_H = P_H (270 - 0.1 P_S - 0.58 P_H) + P_S (225 - 0.6 P_S + 0.3 P_H) \)
(ii) \( P_S D_S + P_H D_H = P_S (225 - 0.6 P_S + 0.3 P_H) + P_H (270 - 0.1 P_S - 0.58 P_H) \)
(iii) \( P_S D_S - P_H D_H = P_S (225 - 0.6 P_S + 0.3 P_H) + P_H (270 - 0.1 P_S - 0.58 P_H) \)
(iv) \( P_S D_S - P_H D_H = P_S (225 + 0.6 P_S + 0.3 P_H) - P_H (270 - 0.1 P_S - 0.58 P_H) \)
**Select your answer:**
*Drop-down selection box*
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 (\( P_S \)): $____
Selling price of the Horizon (\( P_H \)): $____
Total Revenue: $____
Expert Solution
Step 1: Define the problem
There are two types of cameras : Sky eagle (s) & Horizon (H)
Demand function of S : Ds = 225 - 0.6Ps + 0.3 Ph
Demand function of H : Dh = 270 + 0.1Ps - 0.58 Ph
Where ,
Ph = Price of h , Ps = Price of S
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