The Owner of a Jewelry Store Has to Decide How $f ( x , y ) = 6 x _ { 1 } ^ { 2 / 3 } x _ { 2 } ^ { 1 / 3 }$

question 70

Essay

The owner of a jewelry store has to decide how to allocate a budget of $540,000.He notices that the earnings of the company depend on investment in inventory x₁ (in thousands of dollars)and expenditure x₂ on advertising (in thousands of dollars)according to the function $f ( x , y ) = 6 x _ { 1 } ^ { 2 / 3 } x _ { 2 } ^ { 1 / 3 }$ How should the owner allocate the $540,000 between inventory and advertising to maximize his profit?

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Definitions:

Economic Resource

Any good or service that can be used to produce other goods and services, including labor, land, capital, and entrepreneurship.

Factory Workers

Individuals employed in industrial production settings, operating machinery or assembling goods.

Retail Store

A business establishment that sells goods or services directly to the public, typically from a fixed location or online platform.

Production Possibilities Curve

A graphical representation illustrating the maximum output possibilities for two goods, given a set of inputs and technological efficiency.