2n The Camera Shop sells two popular models of digital SLR cameras. The sales of these products are not independent; if the price of oneincreases, the sales of the other increases. In economics, these two camera models are called substitutable products. The store wishes toestablish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationshipsbetween the quantity sold (N) and price (P) of each model.N = 185 - 0.7P, + 0.55P.Na = 282 + 0.08PA - 0.7PB(a) Construct a model for the total revenue and implement it on a spreadsheet. What is the profit (in dollars) predicted by your modelwhen the price of model A is P, = $230 and the price of model B is Pa = $320.$ 93318(b) Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each pricefrom $250 to $500 in increments of $10.PA = 270Рв - 390Need Help?Read ItWatch ItSubmit Answer

Total revenue refers to the total amount earned by the producer from the sale of the commodity.…

The Camera Shop sells two popular models of digital SLR cameras. The sales of these products are not independent; if the price of one increases, the sales of the other increases. In economics, these two camera models are called substitutable products. The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and price (P) of each model. NA = 185 -0.7PA + 0.55PB Ng = 282 +0.08PA - 0.7PB (a) Construct a model for the total revenue and implement it on a spreadsheet. What is the profit (in dollars) predicted by your model when the price of model A is PA = $230 and the price of model B is PB = $320. $93318 x (b) Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in increments of $10. PA = 270 PB 390 Need Help? Read It x x Watch It

The Camera Shop sells two popular models of digital SLR cameras. The sales of these products are not independent; if the price of one increases, the sales of the other increases. In economics, these two camera models are called substitutable products. The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and price (P) of each model. NA = 185 -0.7PA + 0.55PB Ng = 282 +0.08PA - 0.7PB (a) Construct a model for the total revenue and implement it on a spreadsheet. What is the profit (in dollars) predicted by your model when the price of model A is PA = $230 and the price of model B is PB = $320. $93318 x (b) Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in increments of $10. PA = 270 PB 390 Need Help? Read It x x Watch It

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The Camera Shop sells two popular models of digital SLR cameras. The sales of these products are not independent; if the price of one
increases, the sales of the other increases. In economics, these two camera models are called substitutable products. The store wishes to
establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships
between the quantity sold (N) and price (P) of each model.
N = 185 - 0.7P, + 0.55P.
Na = 282 + 0.08PA - 0.7PB
(a) Construct a model for the total revenue and implement it on a spreadsheet. What is the profit (in dollars) predicted by your model
when the price of model A is P, = $230 and the price of model B is Pa = $320.
$ 93318
(b) Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price
from $250 to $500 in increments of $10.
PA = 270
Рв - 390
Need Help?
Read It
Watch It
Submit Answer

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