Pharoah Garden recently opened her own basketweaving studio. She sells finished baskets in addition to selling the raw materials
needed by customers to weave baskets of their own. Unfortunately, owing to space limitations, Pharoah is unable to carry all the
varieties of kits originally assembled and must choose between two basic packages.
The Basic Kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Pharoah $10 and sells
for $23. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the
reeds and weave the basket. Pharoah produces the Stage 2 kit by using the materials included in the Basic Kit. Because she is more
efficient at cutting and dying reeds than her average customer, Pharoah is able to produce two Stage 2 kits in one hour from one Basic
Kit. (She
values her time at $20 per hour.) The Stage 2 kit sells for $33.
(a1)
