Math Solutions

[Solved] A chain of sporting goods stores sells official "Albert Pujols For President" bumper stickers. Their agreement with Mr. Pujols' marketing company

Question: A chain of sporting goods stores sells official "Albert Pujols For President" bumper stickers. Their agreement with Mr. Pujols' marketing company requires that they sell these for $10 per sticker and pay a royalty of $3 per sticker. Their direct production costs are $1 per unit. Since these numbers are non-negotiable their markup over these direct costs is $6. The sporting goods store is allowed to advertise at whatever level they choose. Given the retail price of $10, the retail demand is determined to follow the following formula

\[\mathrm{Q}=\mathrm{A}-.5 \mathrm{~A}^{2}\]

where A represents the number of advertising units purchased.

  1. If advertising can be purchased at a price of $2.4 per unit, the retailers profit function expressed as a function of \(\mathrm{A}\) is (the correct answer is not a number but an equation).
    Profit =
    B. The optimal level of advertising is
    \(\mathrm{A}=\)
    Price: $2.99
    Solution: The downloadable solution consists of 1 pages
    Deliverable: Word Document


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