Problem bank

Problem 320 of 333HardCalculusP320

Splitting capital across three desks

  1. You have 4 units of capital to allocate across three trading desks. Desk ii given xi≥0x_i \ge 0 units earns ailn⁡(1+xi)a_i \ln(1 + x_i), with (a1,a2,a3)=(6,3,1)(a_1, a_2, a_3) = (6, 3, 1). All capital must be allocated.

    Find the allocation that maximizes total earnings and the maximum. What is one extra unit of capital worth at the margin? How large must the budget be before desk 3 receives anything?