(page 3 of 4)

 

(click on this figure to see the problem again)

 

Our only two constraints in this problem arise from the supply limitations for the two agents. We can express these restrictions with the following inequalities:

 

Agent 1:

Agent 2:

 

 

And finally, we need to determine if it is necessary to impose sign restrictions on our variables. In this example, both our variables must be positive. Therefore we impose the following non-negativity conditions: