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GMCO produces three types of cars




Question;GMCO produces three types of cars: compact, medium, and large. The variable costs per car and production capacity (per year) for each type of car are given in the file P09 _22.xls. The annual demand for each type of car depends on the prices of the three types of cars, also given in the file P09 _22.xls. In this latter table, Pc is the price charged for a compact car (in thousands of dollars). The variables PM and PL are defined similarly for medium and large cars. Suppose that each compact car gets 30 mpg, each medium car gets 25 mpg, and each large car gets 18 mpg. GMCO wants to keep the planet pollution free, so in addition to maximizing profit, it wants to maximize the average miles per gallon attained by the cars it sells. Construct a trade-off curve between these two objectives.


Paper#54345 | Written in 18-Jul-2015

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