Combinations of labor and capital for three levels of output

Assignment Help Business Economics

Reference no: EM131197915

The production engineers at Impact Industries have derived the optimal combinations of labor and capital. These are the only two inputs used by Impact. The following chart shows the combinations of labor and capital for three levels of output.

1. Q is the output level. L* is the optimal amount of labor. K* is the optimal amount of capital. The price of labor is $100 per unit. The price of capital is $20 per unit.

Q L* K*

120 5 20

180 7 7

240 12 14

2. If the manager of Impact Industries decides to produce 180 units, what will the long-run total cost and long-run average cost of producing 180 units? Show all calculations.

3. An industry consists of two ?rms. The demand function for the product of ?rm i is

qi =24−5pi +2pj.

The marginal cost of production for each ?rm is zero. For what values of the discount factor will grim punishment strategies—with reversion to Bertrand-Nash prices—support a collusive agreement to maximize joint pro?ts?

Reference no: EM131197915

Questions Cloud

About turnover because of the high costs of hiring : Many organizations express concern about turnover because of the high costs of hiring and training new employees. Although not all turnover is negative, organizations can benefit from being able to measure and quantify it. Give reasons for turnover c..

Determine the moment about o of the tension t : The mechanism of Prob. 2/16 is repeated here. For the conditions () = 40°, T = 150 N, and r = 200 mm, determine the moment about O of the tension T applied by cable AB to point A.

Suppose that company offers quantity discounts : Suppose that a company offers quantity discounts. If up to a 1000 units are purchased, the unit price is $10; if more than a thousand and up to 5000 units are purchased, the unit price is $9; and if more than 5000 units are purchased, the unit price ..

What are three uses of personal power : In an organization with which you are familiar, what are three uses of personal power that enhanced organizational performance? How were they used?

Combinations of labor and capital for three levels of output : The production engineers at Impact Industries have derived the optimal combinations of labor and capital. These are the only two inputs used by Impact. The following chart shows the combinations of labor and capital for three levels of output. If the..

What factors contribute to unsuccessful outsourcing : 1. How does size, cost and profitability affects organizations decisions to outsource? 2. What factors contribute to unsuccessful outsourcing?

How rhetorical situation function when someone gives speech : Drawing on Chapter 1 of textbook and the Lloyd Bitzer reading, define the following terms and describe how they function when someone gives a speech. (The example can be actual or hypothetical.)

Find critical value of discount factor to sustain collusion : Suppose that demand is given by P = A− Q and marginal costs are constant and equal to c where A > c. Suppose that there are n ?rms and the stage game is Cournot. Find the critical value of the discount factor to sustain collusion if the ?rms play a s..

Outsourcing contribute to labour productivity : 1. How does outsourcing contribute to quality service delivery? 2. How does outsourcing affect human resource management? 3. How does outsourcing contribute to labour productivity?

User Account

All Pages