Minimization: Islandia

The government of Islandia is concerned with the use of scarce foreign currency and
also with the fulfillment of domestic demand for nightgowns. Nightgowns can be
produced internally or imported. Domestic production capacity is 400 while demand is
for a minimum of 600 units. The unit cost in domestic production is $25 and the unit
cost of imported units is $20. Domestic production requires imported input that costs
$10 per nightgown, i.e., $10 of the $25 cost. The amount of available foreign currency
for this product is $10,000 and cannot be exceeded. The objective is to minimize the
total cost of fulfilling product demand.

Solve the optimum. What is the economic meaning of the solution?

If product demand turns out to be 650, is it feasible? If so, describe its effect on the
optimal solution.