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Your company has recently developed capabilities to produce a new model of frying pans with a revolutionary non-stick coating, called the PanX. Your company is currently producing at capacity. The marketing department has provided you with the following information about the per-unit demand for the PanX:
Price
Quantity
Revenue
$28
0
$0
$27
1
$26
2
$52
$25
3
$75
$24
4
$96
$23
5
$115
$22
6
$132
$21
7
$147
If you dedicated all resources to the production of one good, you can produce up to 20 PanX or 40 Standard Pans. Every unit produced of PanX would displace the production of 2 Standard Pans. Your company is currently producing 40 Standard Pans. PanX costs $5.75 to produce. Standard Pans have a demand function of Qd = 124 - 4P and cost $11 to produce. How many units of PanX should the company produce to achieve maximum profits from selling both PanX and Standard Pans?
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