The manager of a live stock feed company faces a production function Q=2L^0.5 K^0.5 where K represents capital equipment and L is labour.Assume the company has spent $16,000 4 units of capital equipment it owns.If workers at the firm are paid a competitive wage of $100 per worker and Feed Can be sold for $200per unit . 1.what is your profit maximising level of output and labour usage 2.what is your maximum profit 3.Use the production function to get the profit function.
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The manager of a live stock feed company faces a production function Q=2L^0.5 K^0.5 where K represents capital equipment and L is labour.Assume the company has spent $16,000 4 units of capital equipment it owns.If workers at the firm are paid a competitive wage of $100 per worker and Feed Can be sold for $200per unit .
1.what is your profit maximising level of output and labour usage
2.what is your maximum profit
3.Use the production function to get the profit function.
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- Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.The manager of a small firm is considering whether to produce a new product that would require leasing some special equipment at a cost of$20,000 per month. In addition to this leasing cost, a production cost of$10 would be incurred for the first 1000 units (including the 1000th unit). After that, a production cost of$15 would be incurred for the rest. Each unit sold generates$20 in revenue. Determine how many units should be produced each month to make it profitable to produce this product.For a table manufacturing company, selling price for a table is $183.00 per Unit, Variable cost is $25.00 per Unit, rent is $3,380.00 per month and insurance is $296.00 per month. Company wants to expand its business and improve the table quality, it wants to increase the selling price for a table to $254.00 per Unit, Variable cost to $43.00 per Unit, bigger area will have rent $5,235.00 per month and insurance is $362.00 per month At what point will the company be indifferent between the current mode of operation and the new option?
- Note :write the equations seperately A firm is making two products A & B. Each unit of A incurs a cost of production to the tune of $150 and that of B incurs a cost of $200. Product A carns a profit of $15/unit and B gets $20/unit. The estimated monthly demand of both A & B is at maximum 500 units. Monthly production budget is set at $50.000.How many units of A & B should the firm make in order to maximize profit. Conduct sensitivity analysis and answer the following questions: 1. State the optimal solution. 2. What is the objective function value? 3. Find out the range of profit for A in the objective function for which the above solution remains optimal.Suppose years of schooling, s, is the only variable that affects earnings. The equations for the weekly salaries of male and female workers are given bywm = 500 + 100sandwf = 300 + 75sOn average, men have 14 years of schooling and women have 12 years of schooling.a. What is the male-female wage differential in the labor market?b. Using the Oaxaca decomposition, calculate how much of this wage differential is due to discrimination?c. Can you think of an alternative Oaxaca decomposition that would lead to a different measure of discrimination? Which measure is better?1. Cox Electric makes electronic components and has estimated the following for a new design of one of its products. Fixed cost = $24,375 Material cost per unit = $0.17 Labor cost per unit = $0.12 Revenue per unit = $0.68 Note that fixed cost is incurred regardless of the amount produced. Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all that it produces, profit is calculated by subtracting the fixed cost and total variable cost from total revenue. Construct an appropriate spreadsheet model to find the profit based on a given production level and use the spreadsheet model to answer these questions. a. Construct a one-way data table with production volume as the column input and profit as the output. Breakeven occurs when profit goes from a negative to a positive value; that is, breakeven is when total revenue = the total cost, yielding a profit of zero. Vary production volume from 0 to 100,000 in increments of 10,000.…
- Triple X Company manufactures and sells refrigerators. It makes some of the parts for the refrigerators and purchases others. The engineering department believes it might be possible to cut costs by manufacturing one of the parts currently being purchased for $8.25 each. The fi rm uses 100,000 of these parts each year. The accounting department compiles the following list of costs based on engineering estimates:Fixed costs will increase by $50,000. Labor costs will increase by $125,000.Factory overhead, currently running $500,000 per year, may be expected to increase 12 percent.Raw materials used to make the part will cost $600,000.Given the preceding estimates, should Triple X make the part or continue to buy it?An electronics firm is currently manufacturing anitem that has a variable cost of $.50 per unit and a selling priceof $1.00 per unit. Fixed costs are $14,000. Current volume is 30,000 units. The firm can substantially improve the productquality by adding a new piece of equipment at an additional fixedcost of $6,000. Variable cost would increase to $.60, but volumeshould jump to 50,000 units due to a higher-quality product.Should the company buy the new equipment?A furniture company is producing two types of furnitureand wants to determine the profit maximizing output combination. Product A requires 8 board feet of wood and 2 lbs of wicker. Product B requires 6 board feet of wood and 6 lbs of wicker. There are 2000 board feet of wood available for product and 1000 lbs of wicker. Product A earns a profit margin of $30 a unit and Product B earns a profit margin of $40 a unit. Show all of your work and provide evidence that you can set up and solve a linear programming (LP) problem. Clearly identify your answer(s) and provide a brief discussion of the results. You may use the POM (preferred and easier) or another software to complete this problem. Submit your results from the software in an Excel file. Each of questions below can be answered by running the problem in POM or the MAC version of QM-POM and using the ranging window in POM or the sensitivity output in the MAC version. Formulate and solve the problem as a linear programming…
- A furniture company is producing two types of furnitureand wants to determine the profit maximizing output combination. Product A requires 8 board feet of wood and 2 lbs of wicker. Product B requires 6 board feet of wood and 6 lbs of wicker. There are 2000 board feet of wood available for product and 1000 lbs of wicker. Product A earns a profit margin of $30 a unit and Product B earns a profit margin of $40 a unit. Show all of your work and provide evidence that you can set up and solve a linear programming (LP) problem. Clearly identify your answer(s) and provide a brief discussion of the results. You may use the POM (preferred and easier) or another software to complete this problem. Submit your results from the software in an Excel file. Each of questions below can be answered by running the problem in POM or the MAC version of QM-POM and using the ranging window in POM or the sensitivity output in the MAC version. a. Formulate and solve the problem as a linear programming…A manager wants to know how many units of each product to produce on a daily basis in order toachieve the highest contribution to profit. Production requirements for the products are shown inthe following table.ProductMaterial 1(pounds)Material 2(pounds)Labor(hours)A 2 3 3.2B 1 5 1.5C 6 — 2.0Material 1 costs $5 a pound, material 2 costs $4 a pound, and labor costs $10 an hour. Product Asells for $80 a unit, product B sells for $90 a unit, and product C sells for $70 a unit. Availableresources each day are 200 pounds of material 1; 300 pounds of material 2; and 150 hours of labor.The manager must satisfy certain output requirements: The output of product A should not bemore than one-third of the total number of units produced; the ratio of units of product A to units ofproduct B should be 3 to 2; and there is a standing order for 5 units of product A each day. Formulate a linear programming model for this problem, and then solveAs a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the coming year to reach the break-even point. You have decided to break down the sales for the club into four categories, the first category being beer. Your estimate of the beer sales is that 32,000 drinks will be served. The selling price for each unit will average $1.50; the cost is $1.25. The second major category is meals, which you expect to be 10,000 units with an average price of $12.50 and a cost of $6.00. The third major category is desserts and wine, of which you also expect to sell 8,000 units, but with an average price of $2.25 per unit sold and a cost of $1.25 per unit. The final category is lunches and inexpensive sandwiches, which you expect to total 24,000 units at an average price of $6.50 with a food cost of $3.75. Your fixed cost (i.e., rent, utilities, and so on) is $1,600 per month plus $2,200 per month for entertainment.…