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# Optimum Level of Activity under expenditure constraint

Suppose you want to find the optimal combination of two activities A and B, which generate the total benefits presented in the table below. The price of A is \$40 and the price of B is \$100. You face expenditure constraint of \$780 on the activities of A and B. Find the optimal combination of activity A and B under this expenditure constraint?

Level of Total Benefit Level of Total Benefit
Activity A of Activity A Activity B of Activity B
1 \$800 1 \$1,000
2 1,440 2 1,900
3 2,000 3 2,700
4 2,360 4 3,400
5 2,680 5 4,000
6 2,960 6 4,500
7 3,200 7 4,900
8. 3,400 8 5,200

#### Solution Preview

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Suppose you want to find the optimal combination of two activities A and B, which generate the total benefits presented in the table below. The price of A is \$40 and the price of B is \$100. You face expenditure constraint of \$780 on the activities of A and B. Find the optimal combination of activity A and B under this ...

#### Solution Summary

Shows how to select the optimal combination of activity A and B under this expenditure constraint

\$2.19