Consider the Following Linear Programming Model This Problem Violates Which of the Following Assumptions?
A)additivity
B)divisibility

question 47

Multiple Choice

Consider the following linear programming model:
$$\begin{array} { l l } \operatorname { Min } & 2 \mathrm { X } _ { 1 } + 3 \mathrm { X } _ { 2 } \\\text { Subject to: } \\& \mathrm { X } _ { 1 } + 2 \mathrm { X } _ { 2 } \leq 1 \\& \mathrm { X } _ { 2 } \leq 1 \\& \mathrm { X } _ { 1 } \geq 0 , \mathrm { X } _ { 2 } \leq 0\end{array}$$
This problem violates which of the following assumptions?

• A)additivity
• B)divisibility
• C)non-negativity
• D)proportionality
• E)linearity

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Definitions:

Barrier To Entry

Barriers to entry are obstacles or impediments that make it difficult for new entrants to enter a particular market, such as high start-up costs, strict regulations, or strong brand loyalty among consumers.

Economies Of Scale

Economies of scale are cost advantages reaped by companies when production becomes efficient, as the cost per unit of output decreases with the increase in scale of operation.

Natural Monopoly

An industry that realizes such large economies of scale that single-firm production of that good or service is most efficient.

Profit-Maximizing Price

The price at which a firm can sell its product to earn the maximum possible profit on those sales.