Calculate the short run total cost function

Reference no: EM131244964

Problem -

A company has 10 machines, each of which can produce one part per hour. A machine requires one worker to operate it and can run for at most 16 hours per day. Workers can work between 0-12 hours per day. Workers earn $10 per hour for the first 8 hours and $20 per hour thereafter. The firm can have one of two types of generators: A small generator which powers a machine at a cost of 5$ per hour; or a large generator which powers a machine at a cost of $2 per hour but has an additional daily usage cost of $180. In the short run the company cannot hire/fire workers or change its generator. In the medium run it can hire/fire workers. In the long run it can also change its generator.

a) Calculate the short run total cost function and marginal cost function for

i) A company with a small generator and 6 workers; ii) A company with a larger generator and 8 workers

b) Calculate the medium run total cost function and marginal cost function for:

i) A company with a small generator ii) A company with the large generator

c) How high does daily production have to be in order for it to make sense to use the large generator? Calculate the long run production total cost function and marginal cost function.

d) Is MC increasing/decreasing/constant as a function of q in the short run? Medium run? Long run? Explain.

Reference no: EM131244964

Questions Cloud

Why do you feel that the will allow for a successful project : How will your procurement process integrate with the rest of the project? Why do you feel that this will allow for a successful project? What procurement management processes will you use within your plan? Why?

How can dollar figures attached to follow-on work influence : How can the dollar figures attached to follow-on work influence the cost package that you submit for the R&D phase? Would your answer change if the man-hours submitted for the R&D phase become the basis for the production phase?

Definition of b2b marketing : Definition of B2B Marketing. B2B (business-to-business) marketing is marketing of products to businesses or other organizations for use in production of goods, for use in general businessoperations (such as office supplies), or for resale to other..

Describe the companys purpose mission and structure : Explain the company's purpose, mission, and structure. Research information on the web and the Rasmussen Online Library to gain further insight into the company.

Calculate the short run total cost function : Calculate the short run total cost function and marginal cost function for A company with a small generator and 6 workers; A company with a larger generator and 8 workers

Compute intrinsic values and time values : The following option prices are given for Yum Inc, whose stock price equals $50: Compute intrinsic values and time values for each of these options and identify whether they are in the money, at the money, or out of the money

Describe your unique selling proposition : Briefly describe two (2) products (goods or services) offered at a business you are familiar with. Next, identify two (2) major competitors and describe the two (2) products they offer that compete with yours.

How can impact of announcement be included in the proposal : Two contractors decide to enter into a joint venture on a project. What difficulties can occur if the contractors have decided on who does what work, but changes may take place if problems occur? What happens if one contractor has higher salary le..

Determine the target customer and market : Determine the target customer/market(s) that the vehicles in each of these ads would appeal to. In your post, give information about each target group. It could include information related to age, lifestyle values, attitudes, wants and needs, gend..

User Account

All Pages