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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.
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