Solve This Problem Graphically

question 40

Essay

Solve this problem graphically.What is the optimal solution and what constraints are binding at the optimal solution?
MAX: ^{8 X}₁ ^{+ 4 X}₂
Subject to: ^{5 X}₁ ^{+ 5 X}₂ ^{≤ 20}
6 X₁ + 2 X₂ ≤ 18 X₁,X₂ ≥ 0

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Definitions:

Equality

Equality refers to the state of being equal, especially in status, rights, and opportunities.

Total Surplus

Total surplus refers to the sum of consumer surplus and producer surplus in a market, representing the overall benefit that market participants gain from engaging in trade.

High-cost Producer

A producer or company which has higher costs of production compared to competitors, often due to inefficient processes or higher input costs.

Low-cost Producer

A manufacturer or service provider with a competitive advantage allowing them to offer goods or services at a lower price than competitors, often due to operational efficiencies.