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Essential Sdn Bhd produces recycled garbage bag. Currently, they are using 8 units of capital and 20 workers. Payment for the capital is $25/unit and labour is paid $40 per person. Its' production function is: Q = 100K0.5 L0.9
a. Calculate Green's current production and total cost.
b. Justify whether the current inputs employment is the most efficient way for Essential Sdn Bhd to produce the current output. If not, find the most efficient employment of inputs.
c. Prove that the most efficient combination of inputs will give a cheaper cost per unit compared to the current combination of inputs.
d. What is the type of return to scale experienced by Essential Sdn Bhd? Interpret its meaning.
e. Which input is more productive? Give your reason.
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
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