Consider the Following Network Representation of Shipment Routes Between Plants

question 88

Multiple Choice

Consider the following network representation of shipment routes between plants, a distribution center, and retail outlets. The numbers next to the arcs represent shipping costs. For example, the cost of shipping from plant 1 to distribution center 3 is equal to $2.




Assume that Plant 1 can supply 400 units and Plant 2, 500 units. Demand at the retail outlets are: Outlet 4, 300 units; Outlet 5, 250 units; Outlet 6, 450 units.
-Which constraint represents the quantity shipped to retail outlet 6?

• A) X23 + X36 = 450
• B) X23 + X36 + X26 = 450
• C) X36 + X26 ≤ 450
• D) X36 + X26 = 450
• E) 3X36 + 5X26 = 450

Analyze how the marginal analysis framework applies to decision-making.

Explain how government intervention can impact economic efficiency and income distribution.

Evaluate the effects of taxation and government spending on societal welfare.

Distinguish between the concepts of efficiency and equality in the context of economic policy.

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Definitions:

Monopoly Power

The exclusive control or significant influence over a market by a single company, allowing it to restrict competition and dictate prices.

Price Discriminating

It involves charging different prices for the same product or service to different consumers, based on the willingness to pay, often to maximize sales and profits.

Pure Monopolist

A single seller in a market that produces a unique product without close substitutes, controlling the market price.

Marginal Cost

The cost incurred by producing one additional unit of a product or service.