Cost accounting
Not what you're looking for?
1. Consider the cost function:
C = 60 + 20Q + 30Q^2
with MC = 20 +60Q (here Q denotes output)
Part A) Write down the expression for the average cost.
Part B) What is the output elasticity of the total cost at output level of Q = 1 ?
Part C) At an output of 1, does the cost function exhibit economies of scale, diseconomies of scale or neither?
2. Duane breeds parrots for a living. He has discovered that the production function of parrot chicks, Q is:
Q = 0.4K^0.5*L^0.5 (where K is the amount of capital (cages, etc.) and L is the amount of parrot food). From this, Cobb-Douglas production function MP (of L) = 0.2K^0.5*L^-0.5 and MP (of K) = 0.2K^-0.5*L^0.5. The price of K is $8.00 and the price of L is $2.00.
Part A) Suppose Duane wants 144 parrot chicks, how much capital and food should be used to minimize cost and what is the cost of producing that amount of chicks?
Part B) Suppose that Duane is faced with the same problem as in Part (A) except that he has a fixed amount of capital, K = 16. How much food should be used to minimize cost and what is total cost?
Purchase this Solution
Solution Summary
Calculations provided for you.
Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.