Calculate its minimum efficient scale of production

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Reference no: EM13837215

A firm produces both crayons and pencils in constant proportions (1/3 and 2/3 respectively). Its costs are C(q1;q2)=1000+10q1+5q2+9q1q2, where q1 is the output of crayons and q2 the output of pencils.

a) Calculate its ray average cost function

b) Calculate its minimum efficient scale (MES) of production

c) What is the MES is it produces only crayons?

d) What is the MES if it produces only pencils?

Reference no: EM13837215

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