I tried using the following formula: profit*min(demand, supply)-loss*max(0,suppl

Question

I tried using the following formula: profit*min(demand, supply)-loss*max(0,supply-demand) but I keep getting 1300 rather than -300

demand: 50, 100, 150, and 200
supply: 50, 100, 150, and 200

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Explanation / Answer

Formula used is Profit*minimum(demand,supply) - loss*maximum(0,supply-demand)

It is stated that Demand and Supply are same, then you are getting 1300 rather than -300

When you have Supply-Demand = 0, obviously the second part of the formula gives you "0" only, irrespective of values of loss per unit. The first part will give you profit for 500 units for all the periods or 500*profit/unit.

so you are getting 1300 (profit 2.6/unit) and no negative values.

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