A Company Sells Two Products with Information as Follows

question 64

Multiple Choice

A company sells two products with information as follows:

The products are machine made.Four units of product A can be made with one machine hour and two units of product B can be made with one machine hour.The company has a maximum of 3000 machine hours available per month.The company can sell up to 18,000 units of product A per month,and up to 3000 units of product B for the month.What is the optimum product mix to maximize the company's operating income?

• A)1500 units of A and 36,000 units of B
• B)6000 units of A and 3000 units of B
• C)zero units of A and 3000 units of B
• D)6000 units of A and zero units of B

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Definitions:

Supply

The total amount of a product or service that is available for purchase within a market.

Glass Company

A business that specializes in the production and processing of glass products.

House Windows

Transparent openings in a building's envelope that allow light and air to enter while keeping the weather out.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing to sell.