9781118041581

consider cell C7 showing a price of 130. When we created the spreadsheet, we

typed the formula:

into cell C7 (and then pressed return). This formula embodies the price equa-

tion, P  170 20Q. By entering the preceding spreadsheet formula, we are

telling the computer to subtract 20 times the value of cell B7 from 170 and to

enter the resulting numerical value in cell C7. (Note:We typed a formula, not

the number 130, into this cell.)

The other numerical values are similarly determined by formulas. Thus, in

cell D7, we entered the formula:  B7*C7, instructing the spreadsheet to com-

pute revenue as the product of the price and quantity cells. In cell E7, we

entered the cost formula:  100 38*B7. In cell F7, we computed profit by

entering: D7 E7, and in cell D12, we computed MR by entering:  170 

40*B7. Indeed, to gain experience with the ways of spreadsheets, we suggest

that you start with a blank spreadsheet and re-create Table 2A.1 for yourself—

that is, type in labels, numerical values, and formulas as indicated. (Note:Typing

 170  20 *B7,

74 Special Appendix to Chapter 2 Optimization Using Spreadsheets

TABLE 2A.1

Optimizing a

Spreadsheet

ABCDEFG

1

2 THE OPTIMAL OUTPUT OF MICROCHIPS

3

4

5 Quantity Price Revenue Cost Profit

6

7 2.0 130 260 176 84

8

9

10 MR MC Mprofit

11

12 90 38 52

13

14

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