Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $200 per gram plus $50 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $230 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells.
Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $200 per gram plus $50 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $230 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells.
Algebra and Trigonometry (MindTap Course List)
4th Edition
ISBN:9781305071742
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter10: Systems Of Equations And Inequalities
Section10.FOM: Focus On Modeling: Linear Programming
Problem 14P
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Butch (Stinky) Rose's counterfeit Chanel No. 22.5 racket has run into difficulties: It seems that the authentic Chanel No. 22.5 perfume is selling for less than his counterfeit perfume. However, he has managed to reduce his fixed costs to zero, and his overall costs are now $200 per gram plus $50 per gram transportation costs and commission. (The perfume's smell is easily detected by specially trained Chanel Hounds, and this necessitates elaborate packaging measures.) He therefore decides to sell the perfume for $230 per gram to undercut the competition. Specify Stinky's profit function, P(x), where x is the quantity (in grams) of perfume he buys and sells.
P(x) =
Calculate how much perfume should pass through his hands per day in order that he break even.
g
Interpret your answer.
Stinky should buy and sell less than the break-even amount.Stinky should shut down the operation. Stinky should buy and sell more than the break-even amount.
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