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Pucker Lemonade, Inc., is a small company that produces bottled lemonade. Pucker's fixed cost includes the monthly rental cost of the lemon-smashing machines, the bottling machines, and the production plant. Pucker's variable cost is the cost of other inputs--lemons and other ingredients, maintenance of the machines, and wages for the workers who work at the plant. The following table shows Pucker's estimated cost for output, measured in truckloads of lemonade that the company produces each month.
Number of lemon-smashing machines
Fixed cost
Variable cost
10 truckloads
20 truckloads
30truckloads
4
$16,000
$5,000
$8,000
$34,000
5
$22,000
$4,500
$6,000
$30,000
6
$28,000
$3,500
$5,500
$29,000
1. If Pucker uses four lemon-smashing machines, what is the total cost of producing 10 truckloads of lemonade per month?
2. The current lease on Pucker's lemon-smashing machines is about to expire and the manager needs to decide how many of these machines to lease for the coming month. If Pucker needs to produce 20 truckloads of lemonade, how many machines should the company lease in the long run?
Price/Feeder Quantity Demanded Quantity Supplied $300 500 1800 270 600 1700 240 700 1600 210 800 1500 180 1000 1400 150 1100 1300 120 1200 1200 90 1300 1100 60 1400 1000 30 1500 90
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