Homework SourseA manufacturer is planning to sell a new product at the pric
A manufacturer is planning to sell a new product at the price of A dollars per unit and estimates that if x thousand dollars is spent on development and y thousand dollars on promotion, consumers will buy approximately [300 y/(y + 1)] + [120 x/(x + 5)] units of the product. If manufacturing costs are $50 per unit, express profit in terms of x, y, and A.
(HINT: Profit = Revenue - Total Cost of manufacture, development, and promotion)
(HINT: Profit = Revenue - Total Cost of manufacture, development, and promotion)
Solution
No of units = [300 y/(y + 1)] + [120 x/(x + 5)] Revenue = Selling Price * No of units = A*[300 y/(y + 1)] + [120 x/(x + 5)] Cost = 50*[300 y/(y + 1)] + [120 x/(x + 5)] + x + y Profit = A*[300 y/(y + 1)] + [120 x/(x + 5)] - 50*[300 y/(y + 1)] + [120 x/(x + 5)] -X -Y = (A-50)*[300 y/(y + 1)] + [120 x/(x + 5)] -X -Y
