The Operations Manager for the Blue Moon Brewing Co

question 60

Multiple Choice

The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D) . He can only get 675 gallons of malt extract per day for brewing and his brewing hours are limited to 8 hours per day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract. Each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg and profits for Dark beer are $2.00 per keg. The brewery's goal is to maximize profits.
What is the daily profit when producing the optimal amounts?

• A) $0.
• B) $240.
• C) $420.
• D) $405.
• E) $505.

---

Definitions:

Total Revenue

The total amount of money received by a company from its sales of goods or services.

Demand

The desire of purchasers, consumers, or clients for a particular good or service coupled with the ability to pay for it.

Cross-Price Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good, indicating the relationship between the two products.

Peanut Butter

A food paste made primarily from ground dry roasted peanuts, often spread on bread or eaten with other foods.