A company manufacturers a product in the U.S. and sells it in England. The unit cost of manufacturing is $50. The current exchange rate (dollars per pound) is 1.51. The demand function, which indicates how many units the company can sell in England as a function of price (in pounds) is of the power type, with constant 27556759 and exponent -2.4.
a. Develop a model for the company’s profit (in dollars) as a function of the price it charges (in pounds). Then use a data table to find the profitmaximizing price to the nearest pound.
b. If the exchange rate varies from its current value, does the profit-maximizing price increase or decrease? Does the maximum profit increase or decrease?
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