For the problem in Exercise 1 assume the firm now wishes to maximise revenue rather than profit.

Question:

(a) Formulate this problem in terms of determining the revenue-maximising combination of the two products on a weekly basis.

(b) Solve the problem graphically.

(c) Confirm the solution using simultaneous equations.

(d) Identify the binding and non-binding constraints.

(e) Undertake sensitivity analysis on each of the binding constraints and evaluate the management information that this generates.

(f) What rate of overtime should the firm be willing to pay its employees?

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