Note: This problem requires Excel.
The marketing department has determined that the relationship between marketing expenditures (x) and sales can be modelled by the equation Sales = 100x − x2 + 20. Use a Nonlinear Solver tool to determine the level of marketing expenditure that will maximize sales.
A) 40
B) 50
C) 60
D) 70
E) 80

Question

Quizplus · Accepted Answer

To maximize sales based on the given equation $Sales = 100x - x^2 + 20$, we can use the derivative of the sales equation with respect to $x$ and set it to zero to find the critical point. The derivative is $100 - 2x = 0$, solving for $x$ gives $x = 50$. This is the level of marketing expenditure that will maximize sales. Using a Nonlinear Solver tool in Excel to solve this optimization problem would also yield the same result.

Note: This Problem Requires Excel