- = Problem 5. A company is planning to introduce two new products. • It costs $10 per unit to manufacture the first pro

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Problem 5 A Company Is Planning To Introduce Two New Products It Costs 10 Per Unit To Manufacture The First Pro 1 (123.3 KiB) Viewed 19 times

- = Problem 5. A company is planning to introduce two new products. • It costs $10 per unit to manufacture the first product and $30 per unit to manufacture the second product. • It is estimated that if the first product is priced at p1 dollars per unit and the second at p2 dollars per unit then qı - 40 – 8p1 + 5p2 consumers will buy the first product and q2 = 50 + 9p1 – 7p2 will buy the second product. (a) Assuming the company only makes what it can sell, find the profit of the company as a function of p1 and 22. Hint: The revenue of the company is p191 + P292 and the cost is 10q1 + 30q2. (b) How should the company price the two products to generate the largest possible profit? Show your answer corresponds to at least a local maximum.