7.11. Consider production ratios of 2:1:1, 3:2:1, and 5:3:2 for
oil, gasoline, and heating oil. Assume that other costs are the
same per gallon of processed oil.
a. Which ratio maximizes the per-gallon profit if oil costs
$80/barrel, gasoline is $2/gallon, and heating oil is
$1.80/gallon?
b. Suppose gasoline costs $1.80/gallon and heating oil
$2.10/gallon. Which ratio maximizes profit?
c. Which spread would you expect to be most profitable during
the summer? Which during the winter?