An electronics store sells two models of television. The sales of these two models, X and Y, are dependent, that is, if the price of one increases, the demand for the other increases. A study is made to find the relationship between the demand (D) and the price (P) in order to maximize the revenue from these products. The result of the study is shown below
DX = 476 – 0.54 PX + 0.22 PY
DY = 601 + 0.12 PX – 0.54 PY
a. Construct a model for the total revenue and implement it on a spreadsheet.
b. Develop a two-way data table to estimate the optimal prices of each of the two products in order to maximize the total revenue. Vary price of each product from $600 to $900 in increments of $50.
a.
b. From the table shown below, the maximum revenue occurs at prices $700 and $800 for TV models X and Y, respectively.
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