Sara's Sensible Critters Makes Two Kinds of Catnip Toys: Balls

question 72

Short Answer

Sara's Sensible Critters makes two kinds of catnip toys: balls (x1) and mice (x2). The relationship between demand and price for balls and mice is:
x₁ = 1800 - 150p₁
x₂ = 1500 - 300p₂
The cost for a catnip ball is $2 and for the mouse, $3.
Sara has only 200 ounces of catnip on hand. A ball uses a tenth of an ounce and a toy mouse uses one-quarter of an ounce.
-Determine the prices that Sara should charge to maximize profit.

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Definitions:

Retail Store

A business establishment that sells goods or commodities directly to consumers.

Leakage

In economics, money or income that exits the economy through various channels without returning directly as spending or investment.

Circular Flow

A model in economics that depicts how money and goods move through the economy in a loop between households and firms.

Injection

In economics, a method of adding funds or capital to an economy by government spending or exports; in medicine, it's the act of administering a liquid substance directly into the body through a needle and syringe.