Note that the two terms in the Product Rule correspond to the separate effects of increasing the number of stores and the average revenue per store. dR (b) Calculate dt -0 (c) If Couture can implement only one leg (A or B) of its expansion at ! = 0, which choice will grow revenue most rapidly? %3D The revenue per month eamed by the Couture clothing chain at time t is R(t) = N(t)S(t), where N(t) is the number of stores and S(t) is average revenue per store per month. Couture embarks on a two-part campaign: (A) to build new stores at a rate of five stores per month, and (B) to use advertising to increase average revenue per store at a rate of $10,000 per month. Assume that N(0) = 50 and S(0) = $150,000. (a) Show that total revenue will increase at the rate dR 5S(t)+10,000N (t) dt

Note that the two terms in the Product Rule correspond to the separate effects of increasing the number of stores and the average revenue per store. dR (b) Calculate dt -0 (c) If Couture can implement only one leg (A or B) of its expansion at ! = 0, which choice will grow revenue most rapidly? %3D The revenue per month eamed by the Couture clothing chain at time t is R(t) = N(t)S(t), where N(t) is the number of stores and S(t) is average revenue per store per month. Couture embarks on a two-part campaign: (A) to build new stores at a rate of five stores per month, and (B) to use advertising to increase average revenue per store at a rate of $10,000 per month. Assume that N(0) = 50 and S(0) = $150,000. (a) Show that total revenue will increase at the rate dR 5S(t)+10,000N (t) dt

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

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 9E

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