A manufacturer is planning to sell a new product at the price of $250 per unit a

Question

A manufacturer is planning to sell a new product at the price of $250 per unit and estimates that if x thousand dollars is spent on development and y thousand dollars is spent on promotion, consumers will buy approximately 300y/(y+2)+150x/(x+1) units of the product. If manufacturing costs $170 per unit, how much should the manufacturer spend on development and how much on promotion to generate the largest possible profit from the sale of this product? Promotion: ________dollars Development: __________ dollars

Explanation / Answer

profit = revenue - cost

p = 300y / (y + 2) + 150x / (x + 1) - x - y

?p/?x = 150 / (x+1)

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