Exhibit 4-4 A Company Blends Nitrogen and Phosphorous to Produce Two Types

question 8

Essay

Exhibit 4-4
A company blends nitrogen and phosphorous to produce two types of fertilizers. Fertilizer 1 must be at least 50% nitrogen and sells for $55 per pound. Fertilizer 2 must be at least 55% phosphorous and sells for $45 per pound. The company can purchase up to 9000 pounds of nitrogen at $20 per pound and up to 12,000 pounds of phosphorous at $12 per pound.
-Refer to Exhibit 4-4.Assuming that all fertilizer produced can be sold,determine the optimal blending plan for the company.What is the maximum profit

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Definitions:

Quantity Controls

Government-imposed limits on the amount of a good that can be produced or sold within a market.

Price Ceilings

A legally established maximum price for goods or services, aimed at preventing prices from rising too high.

Price Floors

Minimum legal prices set by the government for certain goods and services, intended to ensure that prices do not fall below a certain level.

Institutional Program

A comprehensive initiative conducted by an organization, covering aspects like training, development, or welfare, ingrained within its structure.