The Following Linear Programming Problem Has Been Written to Plan

question 1

Multiple Choice

The following linear programming problem has been written to plan the production of two products. The company wants to maximize its profits.
X₁ = number of product 1 produced in each batch
X₂ = number of product 2 produced in each batch

How much profit is earned if the company produces 10 units of product 1 and 5 units of product 2?

• A)750
• B)2500
• C)2750
• D)3250

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Definitions:

Total Costs

The sum of all expenses a firm incurs in producing a product or offering a service, including both fixed and variable costs.

Total Variable Costs

The sum of all costs that vary with output level, including materials, labor, and other expenses that change with production volume.

Techniques of Production

The methods and processes used by firms to produce goods and services efficiently.

Price of Output

The amount of money that a firm receives from the sale of goods and services it produces.