Production and costs , Business Management

Assignment Help:

A bottling company uses two inputs to assemble bottles of the soft drink Squish: bottling machines and workers. Running the bottling machine is an imperfect substitute for the labor performed by the workers. The production function is: 

  q = 100 K1/4 L½

The implicit rental rate plus hourly operating cost of the machine is r = $15 per hour; and the workers each earn w = $20 per hour.   

The current level of input use for the production of q=1000 bottles is:

 K=16 machine hours and L=25 labor hours.

 Question: Is this firm producing at minimum cost?  If it is minimizing costs, explain why.  If it is not minimizing costs, explain how the firm should change its input use to lower its costs.

For full credit, you must discuss the two efficiency conditions for minimizing cost.  That is:

  Is the bundle technologically efficient?  (yes/no/why or why not)

  Is it economically efficient?  (yes/no/why or why not)


Related Discussions:- Production and costs

What is job evaluation, What is Job Evaluation? Definition of Job Eva...

What is Job Evaluation? Definition of Job Evaluation: It is a systematic process of evaluating various jobs of an organization. Depending on the features and needs of a j

What is a-type inventory in ABC analysis of control, What is A-Type Invento...

What is A-Type Inventory in ABC Analysis of Control? A-Type Inventory: These are low volume and high value type of inventories. It means that their yearly consumption is

Advantages and disadvantages of ib4e, Over the past few years, the company ...

Over the past few years, the company iB4e has underperformed compared with its competitors which enjoy stronger brand recognition. In addition, lots of experienced staff responsibl

Caselet, Mr. Vincent the manager of a large supermarket was taking a manage...

Mr. Vincent the manager of a large supermarket was taking a management course in the evening program at the local collage. The professor had given an interesting but Mr. Vincent th

Business Communication, Q6. Explain the different delivery styles that spea...

Q6. Explain the different delivery styles that speakers can select for their presentation

Mbf, different btewwn cetral and commercal bank

different btewwn cetral and commercal bank

Enhance trading activities between the two countries, QUESTION The Stat...

QUESTION The State Bank of Botswana (SBB) offers banking services on a very large scale in Botswana. International trade between Mauritius and Botswana has gone up in the recen

Assignment, Dear I have assignment 2100 words I need more 900 words how can...

Dear I have assignment 2100 words I need more 900 words how can I now price

Explain the task of research and development wing, Q. Discuss the main task...

Q. Discuss the main task of Research and Development (R & D) wing in the context of development of modern society? Ans. THE MAIN TASK OF RESEARCH AND DEVELOPMENT In the l

Describe why listening is an important skill for managers, Question 1: ...

Question 1: a) Describe why listening is an important skill for managers. b) Illustrate how positive body language may persuade your interviewer that you are a suitable cand

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd