In the long run, a firm will choose a plant size that has the Multiple Choice minimum average total cost of producing its target level of output. capacity to produce the largest quantity of output. minimum of its average fixed cost. maximum level of resource use per unit of output.
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In the long run, a firm will choose a plant size that has the
Multiple Choice
minimum
capacity to produce the largest quantity of output.
minimum of its average fixed cost.
maximum level of resource use per unit of output.
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- Each coffee table produced by Kevin Watson Designer nets the firm a profit of $9. Each book case yields a $12 Profit. Watson's fim is small and it resources limited. During any given production period ( of 1 week ),10 gallons of varnish and 12 lenght of high-quality redwood are available. Each coffee table requires approximately 1 gallon of varnish and 1 lenght of redwood. Each bookcase takes 1 gallon of varnish and 2 lenghts of wood. if the profit for the coffee table is increased from $ 9 to $ 15, what is the new optimal solution? (also, you should show the process of how to get new optimal solution)The marginal cost for a company to produce q items is given by MC(q)=0.004q2−0.6q+620. The company's fixed costs are $8500. Find the marginal cost at a production level of 400 items. The marginal cost at a production level of 400 items is ??? per item.As a production process requires labor L and capital K, q = F (L, K). The wage for a labor is $500, the cost for one capital is $250. If the firm has a budget of $7500 to produce, what is the firm's optimum output 250 200 100 150
- A firm has access to two production processes with the following marginal cost curves: MC1 = 0.25x and MC2 = 6+0.1y, where output in production process 1 is x, output in production process 2 is y and hence total output produced is Q = x+y. Show your work to answer the following questions. (i) If it wants to produce 20 units of output, how much should it produce with each process? (ii) If it wants to produce 38 units of output, how much should it produce with each process? (iii) If it wants to produce 108 units of output, how much should it produce with each process?Given Q=100K^0.5L^0.5 ,w= 30, r=40 i) Find the quantity of labour and capital that the firm should use in order to minimize the cost of producing 1444 units of output ii) What is this minimum cost?A firm has access to two production processes with the following marginal cost curves: MC1 = 0.25x and MC2 = 6+0.1y, where output in production process 1 is x, output in production process 2 is y and hence total output produced is Q = x+y. Show your work to answer the following questions. If it wants to produce 20 units of output, how much should it produce with each process?
- Consider the following marginal cost function MC= 5 + 2qi. (a) Does the production process exhibits increasing returns? decreasing returns? constant returns? (b) If the price is $23. What’s the optimal production level? (c) If the price is $31. What’s the optimal production level?A firm is faced with two production processes, with ATC1=16/Q1+6Q1 and ATC2=240/Q2+2Q2. a. What is the least costly way to produce a total of 12 units? (Solve for Q1 and Q2) b. What is the total cost of producing at this level?The Times-Herald is planning a special-edition magazine. The publishing expenses include fixed costs of $1200 and printing costs of 30 cents per magazine. The magazines will sell for 75 cents each, and advertising revenue is 20 cents per magazine. How many magazines must be sold to make a profit? Please show steps.
- A college professor at LeTall University, Professor Lai, makes mountains out of molehills.The following provides the information about Lai’s production and cost. Molehills are the only input for producing mountains. It takes 100 molehills tomake 1 mountain. The market price of molehills is $20 each. A few years ago, Lai acquired an option contract that allows him to buy up to 2000molehills at $10 each. The contract stipulates that he can buy fewer than 2000molehills but cannot resell the molehills that are obtained through the contract. In order to get governmental permission to produce mountains from molehills, Laipaid $10000 for molehill-masher license.Based on the above, answer the following questions.(a) With the option contract, what is Lai’s marginal cost of producing a mountain ifhe produces fewer than or equal to 20 mountains? What is the marginal cost if heproduces more than 20 mountains?(b) Lai is selling mountains in a perfectly competitive market, in which there is a…The market for high-quality matsutake mushrooms is dependent on the weather. If the weather is good, one kilogram matsutake mushroom can be sold for $30. In bad weather it sells for only $20 per kilogram. Matsutake mushrooms produced one week will not be kept until the next week, A small matsutake mushrooms producer has a cost function given by C = 0.5q^2 + 5q + 100 where q is weekly matsutake mushrooms production. Production decisions must be made before the weather (and the price of matsutake mushrooms) is known, but it is known that good weather and bad weather each occur with a probability of O.5. How much matsutake mushrooms should this firm produce if it wishes to maximize the expected value of its profits?A print shop wants to expand production. It currently has 20 employees and 8 copy machines and recently added two new copiers which increased the daily output by 100,000. They also added 4 employees which increased output by 80,000. Each copier costs twice as much as hiring an extra employee. What is the best course of action: hire an additional worker or purchase an extra copier? Show work
