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

Explain effective decision making, Question 1: (a) List three types of ...

Question 1: (a) List three types of supervision styles. (b) Describe each of them, stressing upon their importance to you as supervisors. (c) Write short notes on two maj

What are the middle management functions, What are the middle management fu...

What are the middle management functions? Middle Management: This includes Superintendents, General Managers and Branch managers. Middle management Functions are: 1

Explain how effective brand management can assist ib4e''s, Over the past fe...

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

Enteprenuership and SMEs, Solutions to a gradual decline in sales in an ind...

Solutions to a gradual decline in sales in an indian restaurant in London

Oral business presentation, How would you prepare yourself for an oral busi...

How would you prepare yourself for an oral business presentation.

How is the leadership affected in the organization, How is the Leadership a...

How is the Leadership affected in the organization? Leadership: It is the knack of getting other people to obey you and do willingly the things which you need them to do.

What are the human relations of a successful manager, What are the human re...

What are the human relations of a successful manager? Human Relations skill: Human Relations skill considers as the capability to work effectively along with others and b

Explain the principal-agent problem in the banking business, QUESTION (...

QUESTION (a) Accepting deposits and making loans are the only products offered by a commercial bank. Discuss this statement. (b) Explain how does a commercial bank normally

Design of unit operations, A detailed commentary on the chemical and mechan...

A detailed commentary on the chemical and mechanical design of at least one process unit operation. Process design of other units should also be completed along with pipe sizes (ma

What are the relevant components of an e-business model, Problem 1: (a)...

Problem 1: (a) What are the relevant components of an E-business model? (b) What is an Electronic Payment System? Why is it important? (c) Explain how payment gateway

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