User Account

All Pages

Find what is the shadow price of the hops constraint

Assignment Help Econometrics
Reference no: EM13222749

Beerco manufactures ale and beer from corn, hops, and malt. Currently, 40 lb of corn, 30 lb of hops, and 40 lb of malt are available. A barrel of ale sells for $40 and requires 1 lb of corn, 1 lb of hops, and 2 lb of malt. A barrel of beer sells for $50 and requires 2 lb of corn, 1 lb of hops, and 1 lb of malt. Beerco can sell all ale
and beer that is produced. Assume that Beerco's goal is to maximize total sales revenue and solve the following LP:

max z = 40ALE + 50BEER
s.t. ALE + 2BEER <= 40 (Corn constraint)
ALE + BEER <= 30 (Hops constraint)
2ALE + BEER <= 40 (Malt constraint)
ALE, BEER >= 0
ALE = barrels of ale produced and BEER = barrels of beer produced.

a. Graphically find the range of values for the price of ale for which the current basis remains optimal.

b. Graphically find the range of values for the price of beer for which the current basis remains optimal.

c. Graphically find the range of values for the amount of available corn for which the current basis remains optimal. What is the shadow price of the corn constraint?

d. Graphically find the range of values for the amount of available hops for which the current basis remains optimal. What is the shadow price of the hops constraint?

d. Graphically find the range of values for the amount of available malt for which the current basis remains optimal. What is the shadow price of the malt constraint?

Reference no: EM13222749

Questions Cloud

What is the net cash outflow for the new machine : The firm's tax rate for ordinary income is 30%. What is the net cash outflow for the new machine after considering the sale of the old machine?
What specific examples can you provide : How does PAC (Production activity control's) provide feedback on costs, efficiency, utilization, and schedule performance? What specific examples can you provide?
Explain cerium is often used as a reducing agent : Cerium is often used as a reducing agent. Although it is expensive, it has a high stabile and constant value of E^ o over a PH range from 0 to 7.
Are the same principles involved in both these questions : Are the same principles involved in both these questions? Explain.
Find what is the shadow price of the hops constraint : Beerco manufactures ale and beer from corn, hops, and malt. Currently, 40 lb of corn, 30 lb of hops, and 40 lb of malt are available. A barrel of ale sells for $40 and requires 1 lb of corn, 1 lb of hops, and 2 lb of malt. A barrel of beer sells f..
Why operations management is important to managers : Articulate key aspects of operations management. Explain why operations management is important to managers in various organizational areas. Please provide specific examples.
Explain what is the mass of 25 atoms of carbon-14 in grams : If one atom of carbon-14 weighs 14.0035 atomic mass units and one atomic mass unit is equal to 1.660539*10^-24 grams, what is the mass of 25 atoms of carbon-14 in grams?
What are some key challenges in terms of achieving : With respect to a firm's supply chain design, what are some key challenges in terms of achieving an optimal level of mass customization?
What is the most that zales would be willing to pay : At present, Zales has 100 rubies, 120 sapphires, and 70 hours of jeweler's labor. Extra rubies can be purchased at a cost of $100 per ruby. Market demand requires that the company produce at least 20 type 1 rings and at least 25 type 2.

Reviews

Write a Review

Econometrics Questions & Answers

  Determine the marginal utility per dollar

Assume that an individual consumes two goods, X and Y. The total utility of each good is independent of the rate of consumption of the other good. The price of X and Y are $40 and $60 respectively. Use the following table of total u..

  How to calculate monthly payment

For the same loan described under Q1, the individual decides that instead of selling the house after the 71st payment, to keep it and shorten the pay off period by increasing the montly payment by $150 each month. What is the number of months re..

  What does the increase in the quantity of housing reveal

When the price of a standard three bedroom house increases from $150,000 to $160,000 a building company increases its output from 20 houses per year to 21 houses per year. What does the increase in the quantity of housing reveal about the cost of ..

  Housing industry overview paper assignment

Using the two economic indicators selected for your Housing Industry Overview Paper assignment, Compare and contrast at least two different eighteen month forecasts for each of the 2-economic indicators.

  What would the gini ratio be if both their incomes doubled

Calculate the Gini ratio for this two-person economy using the geometric formulas for the area of a triangle (= ½ × base × height) and the area of a rectangle (= base × height). The area under the line segment from point a to point b can be though..

  Explain steady rate

Matt Christpher is a 25 year old mechanical engineering and his salary next year will be $60,000.Matt expects that his salary will increase at a steady rate of 5%per year until his retirement at age 65.

  What is probability distribution of equivalent construction

a road between fairbanks and Nome, alaska, will have a most likely construction of $4 million per mile. Doubling this cost is considered to have a probability of 30%, and cutting it by 25% is considered to have a probability of 10%. the states int..

  What was the effective interest rate the engineer paid

The amount of the loan was $23,800, and it had an interest rate of 10% per year. However, because the new graduate had not built up a credit history, the bank made him buy loan-default insurance that cost 5% of the loan amount.

  What amount would you need to invest today

What amount would you need to invest today in order to set asside sufficient funds now to meet the future obligations Assume your money could earn 5.0% per year in low risk securities in the 7 year period in question.

  In which city is the hotel room cheaper

Suppose the Canadian dollar (C$) price of one British pound is C$2.12. A hotel room in London costs 120 pounds, while a similar hotel room in Toronto costs C$250. In which city is the hotel room cheaper, and by how much

  Estimate the annual operating and maintenance costs

Growth Fertilizer purchases a gravity settling tank by borrowing the $50,000 purchase price. The loan is to be repaid with four equal annual payments at an annual compound rate of 15%. It is anticipated that the tank will be used for 9 years and t..

  Calculate the standard deviation of the return

Suppose that an investor has a choice between buying this security or purchasing a different security that also costs $3,000 today but pays off $3,300 with certainty in one year. How is an investor's choice of which security to purchase related to..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd