4. Peachtree Motors

Peachtree Motors is an auto dealership that specializes in the sale of station wagons and light trucks.  Because of its reputation for quality and service, Peachtree has a strong position in the regional market, but demand remains somewhat sensitive to price.  While evaluating the new models, Peachtree’s marketing consultant has come up with the following demand curves:

Truck Demand = 500 – 15 x Truck Price in Thousands

Wagon Demand = 450 – 12 x Wagon Price in Thousands

The dealership’s unit costs are $20,000 for trucks and $25,000 for wagons.  Each truck requires three hours of prep labor, and each wagon requires two hours of prep labor.  The current staff can supply 100 hours of labor.

a. Determine prices at which Peachtree Motors can maximize the profit it generates from combined sales of trucks and wagons.  (You can assume non-integer values for units sold)