A flour mill buys its wheat from two different farms, then processes the wheat into flour. Wheat from Farm X costs the mill $7 per bushel, and wheat from Farm Y costs the mill $15 per bushel. The selling price (in dollars per bushel) for the mill's wheat can be modeled by p(x, y) = 500 x y where x is the demand for the flour milled from Farm X's wheat and y is the demand for flour milled from Farm Y's wheat. Assume that x and y may be zero (so the mill only buys from one of the suppliers) and that the mill can by 1/2 of a bushel. Then the maximum profit is attained when x = y = bushels bushels The amount of the flour mill's maximum profit is $
A flour mill buys its wheat from two different farms, then processes the wheat into flour. Wheat from Farm X costs the mill $7 per bushel, and wheat from Farm Y costs the mill $15 per bushel. The selling price (in dollars per bushel) for the mill's wheat can be modeled by p(x, y) = 500 x y where x is the demand for the flour milled from Farm X's wheat and y is the demand for flour milled from Farm Y's wheat. Assume that x and y may be zero (so the mill only buys from one of the suppliers) and that the mill can by 1/2 of a bushel. Then the maximum profit is attained when x = y = bushels bushels The amount of the flour mill's maximum profit is $
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter26: Factor Markets: With Emphasis On The Labor Market
Section: Chapter Questions
Problem 4QP: Compare the firms least-cost rule with how buyers allocate their consumption dollars.
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Transcribed Image Text:A flour mill buys its wheat from two different farms, then processes the wheat into flour. Wheat from
Farm X costs the mill $7 per bushel, and wheat from Farm Y costs the mill $15 per bushel.
The selling price (in dollars per bushel) for the mill's wheat can be modeled by p(x, y) =
500 x y where x is the demand for the flour milled from Farm X's wheat and y is the demand
for flour milled from Farm Y's wheat. Assume that x and y may be zero (so the mill only buys from
one of the suppliers) and that the mill can by 1/2 of a bushel.
Then the maximum profit is attained when
x =
y =
bushels
bushels
The amount of the flour mill's maximum profit is $
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