Answered: What is the largest possible revenue 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

Trans Global Tractor Trailers has decided to spend up to $900,000 on a fleet of new trucks, and it is considering three models: the Gigahaul, which has a capacity of 6,000 cubic feet and is priced at $60,000; the Megahaul, with a capacity of 5,000 cubic feet, priced at $50,000; and the Picohaul, with a capacity of 2,000 cubic feet, priced at $40,000. The anticipated annual revenues are $500,000 for each new truck purchased (regardless of size). Trans Global would like a total capacity of up to 78,000 cubic feet and feels that it cannot provide drivers and maintenance for more than 18 trucks. How many of each should it purchase to maximize annual revenue?

(Gigahaul, Megahaul, Picohaul) =

trucks

What is the largest possible revenue it can make?

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