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22 September, 18:36

Peggy sells pistachios and almonds at the farmer's market. She currently prices pistachios at $7 per bag and almonds at $4 per bag. She observes that every hour, 4 people each buy one bag of pistachios and 2 people each buy one bag of almonds. Having surveyed them, she learns that 2 of the pistachio buyers would be willing to pay $2 for the bag of almonds while the other two would only be willing to pay $1. Both almond buyers would be willing pay $5 for the bag of pistachios. Suppose Peggy decides to sell a bundle containing one bag of pistachios and one bag of almonds in addition to selling them separately. What price should she charge for the bundle in order to maximize revenue?

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  1. 22 September, 18:58
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    The price she should charge for the bundle in order to maximize profit is 9

    Explanation:

    Solution

    The total pistachios sold = 7 * 2 = 14

    The total almonds sold is = 4*1 = 4

    So,

    The total of both pistachios and almonds = 14 + 4 + 18

    Thus,

    we solve for getting average of the two which is:

    Getting the average of the two in the bundle = 18/2

    =9

    Therefore p = 9
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