Ais Ezhel employs Dj Artz (A) and Bugy (B) to produce songs according to following production function:E(A, B) = A³/4B1/4The hourly cost of Dj Artz is PA and the hourly cost of Bugy is Pg. b) Let PA = 30 , Pg = 10. Suppose Ezhel wishes to produce 10,000 songs. How much hours Dj Artz and Bugy%3Dshould he employ? How much will it cost to produce?c) Suppose that Ezhel wants to produce is now 18,371 songs, but Bugy is not available to contribute his albummore than previous level in the short-run. Assuming he is unable to employ Bugy for more hours, how muchwill it cost to meet the new production level?d) In the long-run, Ezhel will be able to employ Bugy. If Ezhel continues to produce 18,371 units of songs,how much will it cost in the long run?

We are going to use marginal rate of technical substitution method to answer this question.…

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Ais Ezhel employs Dj Artz (A) and Bugy (B) to produce songs according to following production function: E(A, B) = A³/4B?/4 The hourly cost of Dj Artz is Pa and the hourly cost of Bugy is Pg-

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 15P

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Question

Ais Ezhel employs Dj Artz (A) and Bugy (B) to produce songs according to following production function:
E(A, B) = A³/4B1/4
The hourly cost of Dj Artz is PA and the hourly cost of Bugy is Pg.

b) Let PA = 30 , Pg = 10. Suppose Ezhel wishes to produce 10,000 songs. How much hours Dj Artz and Bugy
%3D
should he employ? How much will it cost to produce?
c) Suppose that Ezhel wants to produce is now 18,371 songs, but Bugy is not available to contribute his album
more than previous level in the short-run. Assuming he is unable to employ Bugy for more hours, how much
will it cost to meet the new production level?
d) In the long-run, Ezhel will be able to employ Bugy. If Ezhel continues to produce 18,371 units of songs,
how much will it cost in the long run?

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