dealer deals only in colour TVs and VCRs. He wants to spend up to Rs.12 lakhs to buy 100 pieces. He can purchase a colour TV at Rs.10,000 and a VCR at Rs.15,000. He can sell a colour TV at Rs.12,000 and a VCR at Rs.17,500. His objective is to maximize profits. Assume that he can sell all the items that he stocks.
For the maximum profit, the number of colour TVs and VCRs that he should respectively stock are
The person has 2 options Colour TV- cost price 10k selling price 12k VCR- cost price 15k selling price 17.5k So, his profit margin on each device isTV- 2k per piece and VCR 2.5k per piece. Now, his objective is to maximize profits and not the profit percentage, so he should spend all the money i.e 12 lakhs. If the aim was to maximize profit percentage, he should have bought all 100 pieces of TV because its profit percentage is more than VCR. Let he buys a Tvs and b VCR then a+b=100 and 10a+15b=1200 solving it you will get, a=60 and b=40.
through options we can conclude the answer is C. substitute each option , check whether it is equal to cost price of 12 lakh or not ? If matches then it is the answer. Or go with linear equation method.