Consider a market that is initially served by two firms, each of which charges a price of $16 and sells 100 units of the good. The long-run average cost of production is constant at $15 per unit. Suppose a merger will increase the price to $20 and reduce the total quantity sold from 200 to 150. A. What is the consumer surplu
Labor/Capital Mix - Cobb Douglas: Suppose a firm assumes the following production function: Log Q=2 + .8 log K + .1 log L a) Currently, the firm hires 10,000 workers and employs 50 units of capital. The "wage" of capital and labor are $500 and $800 respectively, what would you suggest would be the firm's mix of labor and capital if it produces 2,000,000 units? b) Is this an example of a Cobb-Douglas Production function? c) Would you suggest this firm merge with similar firms? Explain.
Suppose a firm assumes the following production function: Log Q=2 + .8 log K + .1 log L a) Currently, the firm hires 10,000 workers and employs 50 units of capital. The "wage" of capital and labor are $500 and $800 respectively, what would you suggest would be the firm's mix of labor and capital if it produces 2,000,000 units
1. The attached table summarizes the short-run production function for your firm. Your product (Q) sells for $50 per unit, labor (L) costs $5 per unit, and the rental price of capital (K) is $25 per unit. Lastly, assume capital and labor are used only in whole units, i.e. it is not possible to use 1.37 units of capital or labor,
Charlie loves watching Teletubbies on his local public TV station, but he never sends any money to support the station during their fundraising drives. What name do economists have for Charlie? How can government solve the problem caused by people like Charlie? Can you think of ways the private market can solve this problem? H
1. The production function to build a playground swing is: Q = 15 + 8L - 0.6L2 Where: Q is the total number of swings built in an hour L is the labor of one worker If it costs $10 per hour for a laborer and each swing is sold for $20 and there are no material costs, how many laborers should you hire? How many swings
1.If MC is increasing, what is happening to the ATC? Why is this happening? a. What does the law of diminishing returns have to do with the shape of the AVC and ATC curves? Explain why those curves are U-shaped. b. Why does the ATC curve always lie above the AVC curve? Why does the two curves move closer together, but
Please provide a detailed step by step answer for this question. Word document attached. Find the marginal rate of technical substitution for the following production function: Q=10(0.2L^-0.5+0.8k^-0.5)^-2
1 Explain the relationship between AP and MP. Be sure to use graphs to help support your answer. a Explain the relationship between MP and TP when b. TP has peaked c. TP is declining d. The MP is declining, but still positive. e Suppose that 1 worker generates 8 units of output, 2 workers generate 20, 3 workers ge
Given a firm's production function as Q = 5 L1/2 - 0.1L and its average revenue function as AR = 768 - 3Q, determine the marginal productivity of labor, MPL and the value of L for which it will be zero. Does the production function exhibit the property of diminishing marginal productivity of labor? Determine the marginal reven
A manufacturer of outdoor clothing makes wax jackets and trousers. Each jacket requires 1 hour to manufacture, whereas each pair of trousers takes 40 minutes. The material for a jacket cost £32 and those for a pair of trousers cost £40. The company can devote only 34 hours per week to the production of jackets and trousers,
Government involvement in general scientific research has been justified on the grounds that advances in knowledge are public goods- once produced, information can be shared at virtually no cost. A new production technology in an industry could be available to all firms, reducing costs of production, driving down price, and bene
See attached file for full problem description. Cannondale bikes manufactures a basic road bicycle. Production and sales data for the most recent year are as follows(no beginning inventory): Variable production costs $90 per bike Fixed production costs $450,000 Variable selling & administrative
Need assistance with the attached file on variable and absorption methods. See attached file for full problem description.
Anna Bellatorre, Inc. manufactures five models of kitchen appliances at its Mesa plant. The company is installing activity-based costing and has identified the following activities performed at its Mesa plant. Having analyzed its Mesa plant operations for purposes of installing activity-based costing, Anna Bellatorre, Inc. id
Specialty Steel has carefully measured production in its new plant to determine whether it is technically efficient in production.
Specialty Steel has carefully measured production in its new plant to determine whether it is technically efficient in production. It has found that, for its two inputs K and L, it has the following marginal products: MPK = 150, and MPL = 25. The inputs are hired in perfectly competitive markets, and the firm faces input costs o
Learning Rate: A production lot of 25 units required 103.6 hours of effort. Accounting records show that the first unit took 7 hours. What was the learning rate?
A production lot of 25 units required 103.6 hours of effort. Accounting records show that the first unit took 7 hours. What was the learning rate?
I "think" the attachment is supposed to help!?!??! Please show work. You are a consultant for Woods Restaurants. At the deli counter, during the busy lunch hour (12-1 pm), the amount of sandwiches (Q) that can be made is determined by the number of workers (L). Suppose each worker makes $6 per hour and sandwiches s
Suppose that a simple society has an economy with only one resource, labor. Labor can be used to produce only two commodities- X, a necessity good (food) and Y, a luxury good ( music and entertainment). Suppose that the labor force consists of 100 workers. One laborer can produce either 5 units of necessity per month ( by huntin
Which of the following statements about the short-run production function is true? - MP always equals AP at the maximum point of MP. - MP always equals zero when TP is at its maximum point. - TP starts to decline at the point of diminishing returns. - When MP diminishes, AP is at its minimum point - None of the
A meat company located upstream from a bourbon distillery, dumps waste into the stream, so that the distillery must incur the costs of cleaning the water to the quality standard advertized on the bottle. PB is price of bourbon, PB=$7/unit PM is price of the meat, PM=$5/unit B is units of bourbon production M is units of m
Firm A has no costs of production and sells its production in two buyers. Buyer 1's demand function is p1 = 90 - 10y1 and Buyer 2's demand function is p2 = 60 - 5y2 Assuming that the firm can engage in ordinary price discrimination, find the profit maximizing prices. What is firm A's profit? Now suppose that the firm c
Brief history of the automotive industry, an automotive industry overview, and a SWOTT (Strengths, Weaknesses, Opportunities, Threats, and Trends) analysis of the automotive industry.
The difference between the short-run and the long-run production function is: a. three months or one business quarter. b. the time it takes for firms to change all production inputs. c. the time it takes for firms to change only their variable inputs. d. more information is required to answer this que
(a)Consider a firm with a total short-run cost function C=a+b.Q. New legislation means that it must pay an environmental tax which is a fixed sum, independent of whether it produces any output. How does this tax affect the firm's fixed cost (FC) marginal cost (MC)and average total cost (ATC)? (b) Now suppose that the tax is
A brick factory's main inputs are energy (8000 units a £10 each) and labour (4000 units at £10 each). A new environmental policy will tax energy and subsidise labour so that the firm's costs are unaffected. The Government plans a 1% tax on energy use. An adviser has suggested that a labour subsidy of 2% would leave the costs o
Please can you help with some hints, if you can't help with final solution. Thank you! A cell phone distributor can import cell phones at the world price of $110 per cell phone. The distributor can also have these phones produced within his or her own company at two production lines. Production Line 1 has a total cost funct
Why marginal analysis is so important in managerial economics? Give examples of how this type of analysis can help a managerial decision maker. What are some limitations to using marginal analysis?
I believe that fast food restaurants show short run production function because of a one fixed input, capital. However, I need to elaborate more and produce the production function equation Q=F (L,K,M...) Can you please help? Also on a fast food restaurant like McDonalds, fixed and variable cost are fixed is capital, build
Brazilian ethanol producers (who make ethanol from sugarcane) have lower production costs than U.S. producers. Indeed, even though it costs 16 cents per gallon to transport ethanol from Brazil to the United States, which also imposes and import tariff of nearly 60 cents per gallon on Brazilian ethanol, the United States still i
1. Production Planning. The Bogard Corporation produces three types of bookcases, which it sells to large office supply companies. The production of each bookcase requires two machine operations, trimming and shaping, followed by assembly, which includes inspection and packaging. All three type require 0.4 hour of assembly ti