A chemical company produces three products, A, B, and C, and can sell these products in unlimited quantities at the following unit prices: A, $10; B, $55; and C, $100. Producing a unit of A requires one hour of labor; a unit of B, two hours of labor plus two units of A; and a unit of C, three hours of labor plus one unit of B. Any A that is used to produce B cannot be sold. Similarly, any B that is used to produce C cannot be sold. A total of 4000 hours of labor is available. Only as many as 500 units of product C can be sold. Determine how to maximize the company’s revenue.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter16: Government Regulation
Section: Chapter Questions
Problem 1E
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A chemical company produces three products, A, B, and C, and can sell these products in unlimited quantities at the following unit prices: A, $10; B, $55; and C, $100. Producing a unit of A requires one hour of labor; a unit of B, two hours of labor plus two units of A; and a unit of C, three hours of labor plus one unit of B. Any A that is used to produce B cannot be sold. Similarly, any B that is used to produce C cannot be sold. A total of 4000 hours of labor is available. Only as many as 500 units of product C can be sold. Determine how to maximize the company’s revenue.

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