Sally sells sandals.She can advertise on radio,A₁,or on television,A₂.Profits depend on advertising according to p = 100 + 10A₁ + 20A₂ - A²₁ - A²₂ + 0.5A₁A₂.The profit-maximizing levels of radio and television advertising are: A) A₁ = $8 and A₂ = $12. B) A₁ = $12 and A₂ = $12. C) A₁ = $8 and A₂ = $8. D) A₁ = $12 and A₂ = $8. E) A₁ = $10 and A₂ = $10.

Question

Quizplus · Accepted Answer

To maximize profits, set the partial derivatives of p with respect to A₁ and A₂ equal to zero and solve the resulting system of equations.

Sally Sells Sandals