It costs Extel $25 per chip to make its E86 chip used in notebook and other personal computers.Extel can sell all the chips it manufactures using a unit pricing model of ($60 - $0.01X) where X is the daily production of the chip.Fixed daily production costs are $700.A.Formulate an unconstrained nonlinear model that models Extel's
daily profit for its E86 chip.
B.What should be Extel's daily production of the chip, its price,
and the daily profit from producing the chip?
C.Suppose its capacity to make chips is limited to 2000 per day.
What should be Extel's daily production of the chip, its price, and the daily profit from producing the chip?
D.Suppose its capacity to make chips is limited to 1500 per day.
What should be Extel's daily production of the chip, its price, and the daily profit from producing the chip?
E.Write the Kuhn-Tucker conditions for the model for part D, and show that your solution satisfies these conditions.
Correct Answer:
Verified
A.(Profit = -.01X2 + 35X - 700.)
B.(P...
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