A Company Makes Products a and B from 2 Resources,labor

question 22

Essay

A company makes products A and B from 2 resources,labor and material.The company wants to determine the selling price which will maximize profits.A unit of A costs 30 to make and demand is estimated to be 50 ? .09 * Price of A.A unit of B costs 20 to make and demand is estimated to be 30 ? .14 * Price of B.The utilization of labor and materials and the available quantity of resources is shown in the table.A reasonable price for the products is between 90 and 140.
$\begin{array}{rrrr}\text { Product } & \text { A } & \text { B } & \text { Available resources } \\\hline \text { Labor hr/unit) } & 2 & 4 & 150 \\\text { Material ounces/unit) } & 2 & 8 & 220 \\\text { Manufacturing cost } \$ / \text { unit) } & 30 & 20 & \\\text { Demand units) } & 50-0.09^{*} \mathrm{P}_{1} & 30-0.14^{*} \mathrm{P}_{2} &\end{array}$
Let X₁ = demand for As and X₂ = demand for Bs.Let P₁ = price for As and P₂ = price for Bs.
Formulate the NLP for this company

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Definitions:

External Cost

Costs that are not borne by the parties involved in an economic transaction but are suffered by other members of society.

Free-Rider Problem

A situation where individuals consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production, without contributing to the resource's provision.

Air Pollution

The presence of harmful or excessive quantities of substances, including gases, particulates, and biological molecules, in the Earth's atmosphere, causing diseases, allergies, or environmental damage.

Donations

Voluntary transfers of resources, including money or goods, from one party to another without the expectation of receiving something in return.