An agricultural firm has production function-cost to produce

Assignment Help Business Economics

Reference no: EM13891923

An agricultural firm has a production function (products of the whole year) given by q=500sqty(SF) q is output of agricultural products in pounds. S is land area in square feet. F is number of farmers working.

a. Find the best way to produce 5000 pounds of products in a year when farmers’ wage is $10000 per year and land rental rate is $100 per square feet per year. What is the total cost to produce?

b. Find the best way to produce 10000 pounds of products in a year when farmers’ wage is $10000 per year and land rental rate is $100 per square feet per year. What is the total cost to produce?

c. Find the best way to produce 20000 pounds of products in a year when farmers’ wage is $10000 per year and land rental rate is $100 per square feet per year. What is the total cost to produce?

d. Draw the isoquant curves map. Find the best combination of F and S to produce 5000 pounds on the graph. Use horizontal axis for F and vertical axis for S.

e. From parts a, b and c could you find the total cost function? Write down this function.

f. From part e, calculate AC, MC functions. Is the production of this firm constant/increasing/decreasing return to scale?

Reference no: EM13891923

Questions Cloud

Long-run total cost function for firm producing skateboard : The long-run total cost function for a firm producing skateboards is. Calculate the marginal cost function. What is marginal cost at the output level in part b?

Long-run and short-run aggregate supply curve : The classical economists believed that our economy was always at full employment or tending toward full employment. If our economy were operating below full employment, what would happen, according to the classical, to move the economy back toward fu..

Calculate the short-run average cost function : A firm has a production function given by q=2 sqrt(KL) In the short run, the firm’s amount of capital equipment is fixed at K=100. The rental rate for K is v=$1, and the wage rate for L is w=$4. Find the firm’s short-run total cost function (STC). Ca..

What degree is the public debt burden to future generations : To what degree is the public debt a burden to future generations? Suppose income taxes and unemployment compensation were cut by an equal amount. How would aggregate demand be affected? As late as 1992, we were running budget deficits of nearly $300 ..

An agricultural firm has production function-cost to produce : An agricultural firm has a production function (products of the whole year) given by q=500sqty(SF) q is output of agricultural products in pounds. S is land area in square feet. F is number of farmers working. Find the best way to produce 5000 pounds..

Manufacturers mark-up necessarily represent profit : Electrotech, a maker of household smoke detectors, buys resistors for its smoke alarms for $.15 each. The resistor manufacturer marks-up the resistors from $.10. Does the resistor manufacturer’s mark-up necessarily represent profit?

Produces its monopoly quantity in equilibrium : In a Stackelberg industry with identical firms we know that firm 1, the leader, produces its monopoly quantity in equilibrium. Given this, does the Stackelberg leader necessarily earn a higher profit than the Stackelberg follower? Explain.

Part of its profit-maximizing policy : Suppose that a monopolist has the ability to impose a two-part tariff pricing policy. Would it necessarily set a positive fee as part of its profit-maximizing policy? Explain. What would limit a monopolist’s ability to set such fees?

Compute the total cost of lording and carrying flour : A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,900 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag. Compute the total cost of lordi..

User Account

All Pages