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

Elaborate on the non-verbal communication, QUESTION (a) Determine the t...

QUESTION (a) Determine the ten factors that lead to a successful individual counselling between the counsellor and the client. Answer with examples and one case study. (b) E

Marketing interface, mention 5 measures that will make a dis pleased custom...

mention 5 measures that will make a dis pleased customer patronize the school canteen

Arguments for a country wishing to restrict free trade, Briefly explain the...

Briefly explain the main arguments for a country wishing to restrict free trade. Protection There may be a require to protect fledgling industries which would not be able

Write short notes on partnering, Problem Write short notes on partnerin...

Problem Write short notes on partnering? a) Three broad categories of relationships(Adversarial, Barometric, Complementary) b) Goals of partnership(Reduction in waste , S

Identify five basis functions of the organization, A company Mission statem...

A company Mission statement should determine / identify 5 basis functions of the company, select and discuss 4 elements you have identified in the Airbus Industries mission stateme

What are the relatively distinct leadership styles, What are the relatively...

What are the relatively distinct leadership styles? The three relatively distinct leadership styles are as illustrated below: 1. Authoritarian: leader makes every decision

Marketing, micro and macro environment assignment example

micro and macro environment assignment example

International business and managerial implications, International business ...

International business and managerial implications As Havana tries to expand its business internationally, there are few aspects that need to be taken into consideration. Firs

Bma, 5 steps in the process of evaluating the purchasing and suppy

5 steps in the process of evaluating the purchasing and suppy

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