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Output & Costs

Production Cost and Wages

Complete the statement with increase or decrease. According to the output effect, a decrease in the wage will __________ production costs, thus the price of final goods will __________. The quantity of final goods produced will ___________, thus the demand for labor increase.

Demand Function

The Demand Function for a product can be as Q=400-2P. We would have a fixed cost for this product as 200 and our variable costs are 0.5 per unit. Please let me know the equation for the profit. When is profit maximized? What is the maximum profit?

Estimations of production

a. Calculate the marginal product of labor. b. At what point does diminishing returns set in? c. Calculate the average product of labor. d. Find the three stages of production. See attached file for full problem description.

Price/Output Determination and Competition

Price/Output Determination. Tallahasse Cars Unlimited, Inc., a rapidly expanding new entrant to this area, is considering two proposals for the provision of its cosmetic detailing of cars (washing, waxing, polishing, engine cleaning, etc.). First, a large janitorial agency with some experience in the detailing of cars has offe

Profit Maximization

Fill in the missing data for price (P), total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC) profit (ח) and marginal profit (Mח) in the following table. See attached file for full problem description. A. At what output (Q) Level is profit maximized? B. At what out put (Q) level is re

Price and Output Determination

Price/Output Determination Cold Case, Inc., produces beverage containers used by fast food franchises. This is a perfectly competitive market. The following relation exists between the firm's beverage container output per hour and total production costs: Total Total Output Cost 0 $

Monoply Profit

Pavati Fluid Controls, Inc, (PDC) is a major supplier of reverse osmosis and ultra-filtration equipment, which helps industrial and commercial customers achieve improved production processes and a cleaner work environment. The company has recently introduced a new line of ceramic filters that enjoy patent protection. Are relev

Comparing human capital ROI

The problem is attached. The part about human capital/Becker shouldn't confuse you, this is no different than if it were in a finance class. Becker just says that we can think of education as in investment in "human capital" since it will increase our earnings later in life - but to be rational that investment has to pay off mor

Marginal Analysis

26. Which of the following sets of economic data is minimizing the cost of producing a given level of output? a) MPL = 20, MPK = 40, W = $32, r = $16. b) MPL = 20, MPK = 40, W = $16, r = $32. c) MPL = 40, MPK = 20, W = $16, r = $32. d) MPL = 40, MPK = 40, W = $16, r = $32. 28. It is profitable to hire labor so long as

Unifying Concepts Question

Julie Kowalis, an investment analyst, wants to know if her investments during the past four years have earned at least a 12% return. Four years ago, she had the following investments: a. She purchased a small building for $50,000 and rented space in it. She received rental income of $8,000 for each of the four years and then

Weighted average cost of capital

United Business Forms' capital structure is as follows: Debt-35% Preferred stock-15% Common equity-50 The aftertax cost of debt is 7 percent, the cost of preferred stock is 10 percent, and the cost of common equity (in the form of retained earnings) is 13 percent. Calculate United Business Forms' weighted average cost

Derivative Strategy - Call and put options

Consider the following table of American option prices of ABC Company at some date when the stock was selling at $80.50. All options expire one month later. Strike price Market price of call Market price of put 80 2.50 2.20 85

Monopoly and Calculate Q Values

Microeconomics sixth edition, Pindyck-Perferred format for answer is either Word or Excel. Chapter 10 Page 379 Problem 8 A firm has two factories, for which costs are given by: Factory #1 C1(Q1) = 10Q 2 1 Factory #2 C2(Q2) = 20Q 2 2

The XYZ company

The XYZ company produces output using labor (which it purchases on an as-needed basis in the market for unskilled workers at a wage of $5 per hour) and one machine (which it is obligated to lease at a rental rate of $300 per hour ). The planning horizon precludes XYZ from renting or purchasing any additional machines, as the cu

Managerial Economics - Clarification

13. Suppose that the firm's Production Data is given in the following schedule (where Q is the level of output). Workers Output Q (units) 0 0 1 600 2 1000 3 1290 4 1480 5 1600 6 1680 If P=$50 and w=$14,500, how many workers should the firm hire to maximize profits? Workers Output (Q) MPL 0 0 --- 1 600 600 2 10


Use an isoquant/isocost diagram and words to show how firms will respond to a decrease in the wage rate. Be sure to identify the short run scale effect and the long run substitution effect.

Short-run marginal cost curves

1. If the government imposes a $1 per-unit tax, how do the marginal, average total, and average variable costs change? What if instead the government imposes a $100 per-firm tax? 2. a) Why are short-run marginal cost curves expected to slope upward? b) If you know that average costs are increasing, is the marginal cost

Resolve problems using Lagrangian Multiplier

Please show steps to resolve these problems please use Lagrangian Multiplier if possible. 1. A manufacturer has the following production function: Q=100 K^. 2 L^. 9 If the price per unit of labor is $20 and the price per unit of capital is $10, a) What is the optimal combination of labor and capital to use in order t

Economics Problems

See attached file for full problem description. 1. This graph illustrates the demand for computers in a small country. To develop a domestic computer industry, the government prohibits imports of computers and gives a single local firm the right to produce and sell computers. The demand curve shows the local demand for comput

Monopolistic competition

An industry with one very large firm and 100 very small firms experiences an increase in the demand for its product. Use the dominant firm model to explain the effects on the price, output and economic profit of: a. The large firm b. A typical small firm

Production function, Cost Function, MC, AC

You manage a plant the mass produces engines by teams of workers using assembly machines. The technology is summarized by the production: q = 5KL Where q is the number of engines per week, K is the number of assembly machines and L is the number of labor teams. Each assembly machine rents for r = 10,000$ per week and each

Suppose the firm can produce 5000 units of out put by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5000 units of output?

Answer the following questions on the basis of this information for a single firm: total Cost of capital = $1000; price paid for labor = $12 per labor unit; price paid for raw materials = $4 per raw-material unit. a. Suppose the firm can produce 5000 units of out put by combining its fixed capital with 100 units of labor and

I am having problems trying to solve the following problem. Please provide me with detailed step-by-step solutions. Suppose that a firm's production function is Q = 10 L 0.5 K 0.5 The cost of a unit of L is 20$ and user cost of capital is 80$. a) The firm is currently producing 100 units of output and has determined that

It is a question from industrial organization

GIVEN: TC(qi)=5 qi+10, i=12 P(Q)=20-2Q ASSUME: a cournot duopoly where Q=q1+q2 DEMONSTRATE: the total output is less than the competitive output but more than the monopoly; the duopoly price is more than the competitive price but less than the monopoly; the total profits are more for the duopoly than the com