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Assignment 5 Solutions (1206A5w2008)

Assignment 5 Solutions (1206A5w2008) - MGSC 1206.2...

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MGSC 1206.2 Assignment #5 - SOLUTIONS Winter 2008 Due: 1 pm, Friday, March 7 th TOTAL MARKS FOR THIS ASSIGNMENT = 55 Note: Points will be deducted if you do not (a) show your work including suitable calculations, (b) use proper notation, and (c) answer word problems with words. Hand in your answers to the following questions: 1. Textbook 11.3 #6 (p.631) 2. Textbook 11.4 #12 (p.650) 1 2 pts 2 pts 2 pts 2 pts
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3. Textbook 12.1 #8 (p.681) 4. Textbook 12.2 #8 (p.692) 5. Gardeners Warehouse anticipates selling 7000 bedding plants per week in May and June at $0.99 each. It has been suggested that if they cut their price to $0.89 each, they would be able to increase their sales to 9,000 plants per week. a) Assuming a linear demand relationship between quantity and price, construct a function that will tell Gardeners Warehouse the price that must be set for a given target sales level. Let x = # of plants sold p = price per plant Assuming a linear relationship p = mx + B 00005 . 0 000 , 2 10 . 0 000 , 9 000 , 7 89 . 0 99 . 0 - = - = - - = = quantity in change price in change m 0.99 = -0.00005(7,000) + B = -.35 + B B = 1.34 p = -.00005x + 1.34 2 3 pts 3 pts - for any correct form of the answer 3 pts - for any correct form of the answer
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b) What is their revenue as a function of quantity sold? Revenue = R(x) = (price)*(quantity) = (-.00005x +1.34)x = -0.00005x 2 + 1.34x c) Growing plants involves a fixed cost of $500 and $0.10 per plant, so the cost of growing x plants is C( x ) = 500 + 0.1 x.
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