# Question: Firms often face the problem of allocating an input in

Firms often face the problem of allocating an input in fixed supply among different products. Find the optimal crude oil allocation in the proceeding example if the profit associated with fiber were cut in half, that is, fell to $0.375 per square foot while the profit associated with gasoline stayed at $0.50 per gallon•

(1) Given Gasoline production function of QG = 72MG – 1.5 MG2, what is gasoline marginal profit?

(2) Given fiber production function of QF = 80MF – 2MF2, what is fiber marginal profit?

(3) Determine the Maximize profit.

(4) Determine Total input availability.

(1) Given Gasoline production function of QG = 72MG – 1.5 MG2, what is gasoline marginal profit?

(2) Given fiber production function of QF = 80MF – 2MF2, what is fiber marginal profit?

(3) Determine the Maximize profit.

(4) Determine Total input availability.

## Answer to relevant Questions

Explain the effect on the average lives of sequential-pay structures of including an accrual tranche in a CMO structure.What is the function of the corpus callosum?Taylor Corp. is growing quickly. Dividends are expected to grow at a 30 percent rate for the next three years, with the growth rate falling off to a constant 6 percent thereafter.If the required return is 13 percent and the ...Suppose you manage a firm with two production plants. The marginal product of labor at plant 1 is MP1 = 1400 - L1 where L1 is the number of workers employed in plant 1. The marginal product of labor at plant 2 is MP2 = 2000 ...According to a survey 71 % of major US companies electronically monitor their employees. Suppose that 480 such companies are selected independently and at random. (a) What is the probability that 341 companies in the sample ...Post your question