A food manufacturer is trying to maximize profit by selling wheat-based cereal (C) and wheat bread(B) with raw wheat (W). The production functions are: Cereal: C = 30WC – 1.5WC2 Bread: B = 63WB – 2WB2 Constraint: WC + WB = 9,820 Profit is $1.00 per box of cereal and $0.50 per pack of wheat bread. There are 9,820 units of raw wheat available. How much wheat should go to the cereal (WC)? Enter as a value. ROUND TO THE NEAREST WHOLE NUMBER.

We will use single variable maximisation techniques to solve this question.

Answered: A food manufacturer is trying to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A food manufacturer is trying to maximize profit by selling wheat-based cereal (C) and wheat bread(B) with raw wheat (W). The production functions are:
                Cereal:                 C = 30W_C – 1.5W_C²
                Bread:                   B = 63W_B – 2W_B²
                Constraint:         W_C + W_B = 9,820

Profit is $1.00 per box of cereal and $0.50 per pack of wheat bread. There are 9,820 units of raw wheat available.
How much wheat should go to the cereal (W_C)? Enter as a value. ROUND TO THE NEAREST WHOLE NUMBER.

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