Can I get help with this assignment which needs to have at least 400 words
Firms often face the problem of allocating an input in fixed supply among different products. Find the optimal crude oil allocation for the following example if the profit associated with square foot of fiber is cut to $0.375, while the profit associated with per gallon of gasoline stayed at $0.50.
What is gasoline marginal profit, given gasoline production function of
QG = 72MG – 1.5 MG2
What is fiber marginal profit, given fiber production function of
QF = 80MF – 2MF2
Determine the maximize profit.
Determine total input availability
To maximize the profit by figuring out the optimal allocation of resources, we need to find the point where marginal profits per unit of input for each product are identical i.e., MπG = MπF
