Western clothing company produces denim jeans

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Reference no: EM13834618

1) Western Clothing Company produces denim jeans. Each month the company incurs a fixed cost of $10,000 and variable cost of $8 per pair of jeans. Demand for the jeans depends on the price (P) according to the following relationship: Demand = 1,500 - 24.6P. a) Formulate and solve an optimization problem to determine the price Western Clothing Company should charge for denim jeans to maximize profit. What is the profit associated with this price? b) Western Clothing Company has prepared for a one month sale on the jeans by advertising the denim jeans will cost $20 or less the next month. What price should they change for the jeans next month to maximize profit without exceeding the advertised price of $20. c) What is the impact of the sale on monthly profits?

Reference no: EM13834618

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