The government is auctioning off oil leases at twosites. At each site, 100,000 acres of land are to be auctioned. Cliff Ewing, Blake Barnes, and Alexis Pickensare bidding for the oil. Government rules state that nobidder can receive more than 40% of the land beingauctioned. Cliff has bid $1000 per acre for site 1 landand $2000 per acre for site 2 land. Blake has bid $900per acre for site 1 land and $2200 per acre for site2 land. Alexis has bid $1100 per acre for site 1 landand $1900 per acre for site 2 land.a. Determine how to maximize the government’srevenue with a transportation model.b. Use SolverTable to see how changes in thegovernment’s rule on 40% of all land beingauctioned affect the optimal revenue. Why canthe optimal revenue not decrease if this percentage required increases? Why can the optimalrevenue not increase if this percentage requireddecreases?
The government is auctioning off oil leases at two
sites. At each site, 100,000 acres of land are to be auctioned. Cliff Ewing, Blake Barnes, and Alexis Pickens
are bidding for the oil. Government rules state that no
bidder can receive more than 40% of the land being
auctioned. Cliff has bid $1000 per acre for site 1 land
and $2000 per acre for site 2 land. Blake has bid $900
per acre for site 1 land and $2200 per acre for site
2 land. Alexis has bid $1100 per acre for site 1 land
and $1900 per acre for site 2 land.
a. Determine how to maximize the government’s
revenue with a transportation model.
b. Use SolverTable to see how changes in the
government’s rule on 40% of all land being
auctioned affect the optimal revenue. Why can
the optimal revenue not decrease if this percentage required increases? Why can the optimal
revenue not increase if this percentage required
decreases?
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