A Company Has Two Manufacturing Plants Which Manufacture the Same

question 104

Short Answer

A company has two manufacturing plants which manufacture the same item. Suppose the cost function is given by where q₁ and q₂ are the quantities (measured in thousands) produced in each plant. The total demand q₁ + q₂ is related to the price, p, by How much should each plant produce in order to maximize the company's profit?

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Definitions:

Contingency Table

A table often used in statistics to display the frequency distribution of variables to analyze the relationship between categorical variables.

Binomial Probability Function

A statistical distribution representing the probability of obtaining a fixed number of successful outcomes in a fixed number of trials in an experiment with two possible outcomes.

Rule of Five

An empirical rule suggesting that there's a 93.75% chance that a normal sample will fall within ±1.96 standard deviations of the mean.

Sample Size

The quantity of data points or observations employed in an experiment or research.