Exhibit 8.1 The Following Questions Pertain to the Problem and Spreadsheet Below

question 53

Multiple Choice

Exhibit 8.1
The following questions pertain to the problem and spreadsheet below.
A company makes products A and B from 2 resources, labor and material. The company wants to determine the selling price which will maximize profits. A unit of A costs 25 to make and demand is estimated to be 20 − .10 * Price of A. A unit of B costs 18 to make and demand is estimated to be 30 − .07 * Price of B. The utilization of labor and materials and the available quantity of resources is shown in the table. A reasonable price for the products is between 100 and 200. Let X₁ = demand for As and X₂ = demand for Bs.
Let P₁ = price for As and P₂ = price for Bs
-Refer to Exhibit 8.1. What formula is used in cell B7 of the spreadsheet for this problem?

• A) = 30 − .07 * C3
• B) = 20 − .1 * B3
• C) = B3 − B4
• D) = B5 * B7 + C5 * C7

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