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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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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
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.
What is the company’s profit function in terms of the quantity
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This note was uploaded on 10/25/2011 for the course MATH 1216 taught by Professor Jang during the Spring '11 term at Saint Mary's University Texas.
 Spring '11
 Jang

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