Your own a beer producing company which can advertise on both television (T) and radio (R)....

Your own a beer producing company which can advertise on both television (T) and radio (R). The effect of TV and radio commercials on sales is again given by S(T,R) = 400 + 24T − 3T2 + 56R−3R2 +2TR. You have a budget of $25 that you can spend on T and R. The price of a TV commercial is $1 and the price of a radio commercial is $1. 1.

Determine the optimal level of TV commercials T and radio commercials R if you have to spend all of your budget.

Determine the optimal level of TV commercials T and radio commercials R if you DO NOT have to spend all of your budget. Do you obtain the same answer as above?

Solutions

Expert Solution

case 1: when you have to spend all of your budget.

case: 2hen you do not have to spend all of your budget.

Rahul Sunny answered 2 years ago

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