Bounds Inc. determined through regression analysis that its sales (S) are a function of the amount of advertising (measured in units) in two different media. This relationship is given by the following equation (X = newspapers, Y = magazines): S (X, Y) = 200X+100Y− 10X2− 20Y2 + 20XY Find the level of newspaper and magazine advertising that maximizes the firm’s sales. Calculate the firm’s sales at the optimal values of newspaper and magazine advertising determined in part (a).

Bounds Inc. determined through regression analysis that its sales (S) are a function of the amount of advertising (measured in units) in two different media. This relationship is given by the following equation (X = newspapers, Y = magazines): S (X, Y) = 200X+100Y− 10X2− 20Y2 + 20XY Find the level of newspaper and magazine advertising that maximizes the firm’s sales. Calculate the firm’s sales at the optimal values of newspaper and magazine advertising determined in part (a).

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 8E

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