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Rad Designs sells two kinds of sweatshirts that compete with one another. Their demand functions are expressed by the following relationships: 91 = 78 – 6p1 – 3p2 %D 92%3D 66 - Зр, — бр2 Where p, and p2 are the prices of the sweatshirts in multiples of $10 and q, and q2 are the quantities of the sweatshirts demanded, in hundreds of units. a. Find the formula for total revenue in terms of p, and P2 note: R = P1q1 +P292 %3D b. What prices p, and p2 should be charged for each product in order to maximize revenue? c. How many units of each will be demanded? d. What is the maximum total revenue?

Rad Designs sells two kinds of sweatshirts that compete with one another. Their demand functions are expressed by the following relationships: 91 = 78 – 6p1 – 3p2 %D 92%3D 66 - Зр, — бр2 Where p, and p2 are the prices of the sweatshirts in multiples of $10 and q, and q2 are the quantities of the sweatshirts demanded, in hundreds of units. a. Find the formula for total revenue in terms of p, and P2 note: R = P1q1 +P292 %3D b. What prices p, and p2 should be charged for each product in order to maximize revenue? c. How many units of each will be demanded? d. What is the maximum total revenue?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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 8E
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Rad Designs sells two kinds of sweatshirts that compete with one another. Their demand functions are expressed by the following relationships: 91 = 78 – 6p1 – 3p2 92%3D 66 - Зр, — бр2 Where p, and p2 are the prices of the sweatshirts in multiples of $10 and q, and q2 are the quantities of the sweatshirts demanded, in hundreds of units. a. Find the formula for total revenue in terms of p, and P2 note: R = p1q1 + P292 b. What prices p, and p2 should be charged for each product in order to maximize revenue? c. How many units of each will be demanded? d. What is the maximum total revenue? MacBook Pro Fom/courses/34419/files/5014304?wrap%-1 2$ % & ( 4 5 6 7 9 R Y U P * CO
Transcribed Image Text:Rad Designs sells two kinds of sweatshirts that compete with one another. Their demand functions are expressed by the following relationships: 91 = 78 – 6p1 – 3p2 92%3D 66 - Зр, — бр2 Where p, and p2 are the prices of the sweatshirts in multiples of $10 and q, and q2 are the quantities of the sweatshirts demanded, in hundreds of units. a. Find the formula for total revenue in terms of p, and P2 note: R = p1q1 + P292 b. What prices p, and p2 should be charged for each product in order to maximize revenue? c. How many units of each will be demanded? d. What is the maximum total revenue? MacBook Pro Fom/courses/34419/files/5014304?wrap%-1 2$ % & ( 4 5 6 7 9 R Y U P * CO
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