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The MacDonald sells two popular packages of breakfast all-day-long: Mac A and Mac B . The sales of these products are not independent of each other (in economics, we call these substitutable products, because if the price of one increases, sales of the other will increase).
The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold ( Q ) and prices ( P ) of each model:
QA = 20 - 0.62PA + 0.30PB
QB = 29 + 0.10PA - 0.60PB
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 for each product in order to maximize the total revenue.
c. Use "Solver" to find the optimal prices.
Solver is a Add-on feature that you can download from Excel Home. You will need to show your formular and Solver in Excel spreadsheets.
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