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Question: You own a hamburger stand, "Two Guys". (You don't have any partner, but "Two Guys" sounds better than "One Guy" or "Just a Guy".). Your specialty is delicious cheeseburger that you sell for $7.00 each. The cost of ingredients for each cheeseburger, such as meat, cheese, buns, tomato etc., is $1.65. You hire workers at $12 an hour. The production function for cheeseburgers is Q = 40 sqrt (L), where L is the number of labor hours employed and Q the number of cheeseburgers produced. There is a fixed cost of $172. There is no way to produce delicious cheeseburgers without also producing lots of grease, which needs to be hauled away. In fact, every cheeseburger that you produce, you also produce 1 ounce of grease. Lately, cooking grease has become popular as an ingredient to produce alternative fuel. So, a company begins to buy grease from you every day at the rate of $0.80 per pound, thereby eliminating your cost of hauling away grease and providing you another revenue source. Calculate the daily profit maximizing number of hamburgers, the amount of grease 5 produced, the number of labor hours used and the consequent level of profit. (Note: 1 pound=16 ounces)
Your company has just purchased a new 3D printer for $27,000. The printer is expected to have a negligible salvage value at the end of its useful life (10 years). However, it is expected to generate $8,000 in revenue for your company annually and wil..
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