Optimal package size: 9 Optimal package price: $951.75 units

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Problem 11-15 (algo)
The American Baker's Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase
in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types of
cancer. You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in
packages of three. However, as a result of this new report, a typical consumer's inverse demand for your bran muffins is now P = 7
- 0.5Q.
If your cost of producing bran muffins is C(Q) = 2.5Q, determine the optimal number of bran muffins to sell in a single package and the
optimal package price.
Instructions: Enter your response for the optimal package price rounded to two decimal places.
Optimal package size: 9✔ units
Optimal package price: $951.75 Ⓡ
Transcribed Image Text:Problem 11-15 (algo) The American Baker's Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types of cancer. You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in packages of three. However, as a result of this new report, a typical consumer's inverse demand for your bran muffins is now P = 7 - 0.5Q. If your cost of producing bran muffins is C(Q) = 2.5Q, determine the optimal number of bran muffins to sell in a single package and the optimal package price. Instructions: Enter your response for the optimal package price rounded to two decimal places. Optimal package size: 9✔ units Optimal package price: $951.75 Ⓡ
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