Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A firm's production function is well described by the equation Q = 2L - .01L2 + 3K - .02K2. Input prices are $10 per labor hour and $20 per machine hour, and the firm sells its output at a fixed price of $10 per unit.
a. In the short run, the firm has an installed capacity of K = 50 machine hours per day, and this capacity cannot be varied. Create a spreadsheet (based on the example below) to model this production setting. Determine the firm's profit-maximizing employment of labor. Use the spreadsheet to probe the solution by hand before using your spreadsheet's optimizer. Confirm that MRPL = MCL.
A
B
C
D
E
F
G
H
I
1
2
OPTIMAL INPUTS
3
Output
136.0
4
Price
10.0
5
Labor
20.0
Capital
50.0
6
MPL
1.600
MPK
1.000
MR
10.00
7
Revenue
1360.0
8
MRPL
16.0
MRPK
9
MCL
MCK
Cost
1200.0
10
Ave Cost
8.8
11
12
Profit
160.0
13
b. In the long run, the firm seeks to produce the output found in part (a) by adjusting its use of both labor and capital. Use yourspreadsheet's optimizer to find the least-cost input amounts. (Hint: Be sure to include the appropriate output constraint for cell I3.)
c. Suppose the firm were to downsize in the long run, cutting its use of both inputs by 50 percent (relative to part b). How much output would it now be able to produce? Comment on the nature of returns to scale in production. Has the firm's profitability improved? Is it currently achieving least-cost production?
You have been hired by Nobody State University as a consultant to help the university with how to increase their total revenue. The university has been struggling in recent years,
a bookstore opens across the street from the university book store ubs. the new store carries the same textbooks but
Derive the marginal criterion for profit maximization for a farm business as a function of output. Explain each of the terms in the marginal criterion you have derived.
Clearly label the size of the profit
The worldwide demand for wheat from the U.S. increased and caused the price of wheat in the U.S. to rise. This is a specific instance of a more general economic principle.
What role did the larger community play in the success of the Montgomery Bus boycott? If the community played a large role in the outcome/success of the civil rights movement, did African American constitute more of a community in the South vs. th..
If the government chooses to distribute the permits, does the allocation of permits among firms matter for efficiency? Does it matter in any other ways?
1. What would be true of entitlement spending rose to 100 percent and the federal budget was balanced? (Hint: Under a balanced budget, tax revenues equal the sum of discretionary expenditures.) 2.How would entitlement spending be funded if ta..
Suppose that the price level rises by 5% in a year. You have $1000 in a savings account at 3% interest rate. What is the real rate of return from the account?
Difference between voluntary and involuntary manslaughter
Draw diagrams illustrating the demand curves and how many firefighters would be hired by each of the two municipalities,
1. consider a world in which prices are sticky in the short-run and perfectly flexible in the long-run. appp may not
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd