We are making two fruit drinks, Red berry (R) and Green Mush (GM). The drinks contain a combination of cherry juice (C), cranberry juice (CB) and avocado (A). Red Berry sells for $9 a gallon and Green Mush sells for $11 a gallon. We need at least 100 gallons of red berry and 50 gallons of green mush. Cherry juice contains 400 units vitamin C per gallon, cranberry juice contains 350 units of vitamin C per gallon and avocado contains 200 units of vitamin C. Cherry juice costs $2 per gallon, cranberry juice $1.50, and avocado costs $5. Red Berry must contain at least 325 units of vitamin C per gallon. Green Mush must contain a minimum of 150 units of vitamin C. We have 50 gallons of cherry juice, 70 gallons of cranberry juice and unlimited supply of avocado juice. Find:
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You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?