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MC Question 10
A linear programming model has been formulated for two products, X and Y. The objective function is depicted by the formula C = 5X + 6Y, where C = contribution, X = the number of product X to be produced and Y = the number of product Y to be produced.
Each unit of X uses 2 kg of material Z and each unit of Y uses 3 kg of material Z. The standard cost of material Z is $2 per kg.
The shadow price for material Z has been worked out and found to be $2·80 per kg.
If an extra 20 kg of material Z becomes available at $2 per kg, what will the maximum increase in contribution be?
A. Increase of $96
B. Increase of $56
C. Increase of $16
D. No change