Management

Carco Company has a $150,000 advertising budget. To increase automobile sales, the ?rm is considering advertising in newspapers and on television. The more Carco company uses a particular medium, the less effective is each additional ad. Table 50 shows the number of new customers reached by each ad. Each newspaper ad costs $1,000, and each television ad costs $10,000. At most, 30 newspaper ads and 15 television ads can be placed.

How can Carco maximize the number of new customers created by advertising?

TABLE 50

Number of Ads New Customers

Newspaper 1–10 900

11–20 600

21–30 300

Television 1–5 10,000

6–10 5,000

11–15 2,000

Solution:

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