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

Challenges and forces which organisations face today, Question 1: (a) ...

Question 1: (a) Organisational Behaviour (OB) seeks to understand how we can best understand human behaviour in organisations. Discuss in relation to the challenges and for

Major hrm problems facing contemporary organisations, Question 1: (a) I...

Question 1: (a) In modern organisations, who performs the Human Resource Management tasks? (b) How do the different providers of HR services affect the traditional role play

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

Illustrate the term accounting, Illustrate the term accounting? Accou...

Illustrate the term accounting? Accounting: It is an art of classifying and recording data. Here, the data considers to transactions consisting of monetary or financial v

Discuss and analyze environmental protection programs, A clean environment ...

A clean environment is a basic component of quality service and is thus important for the development of travel, tourism and hotel industries. The sustainable prosperity of travel,

Data confidentiality, QUESTION Security Risk Management is a systematic...

QUESTION Security Risk Management is a systematic process for determining the likelihood of various security attacks and for identifying the actions needed to prevent or otherw

DIESEAL, critically analyse diesel''''s marketing mix strategies

critically analyse diesel''''s marketing mix strategies

Distinguish between a group and a team, QUESTION 1 (a) Using suitable e...

QUESTION 1 (a) Using suitable examples distinguish between formal and informal organization. (b) Describe any two characteristics a formal Organisation. (c) Illustrate an

Show the cross-functional crm processes, Question: a. Research shows th...

Question: a. Research shows that there are five key cross-functional CRM processes that need to be considered by most organizations. What are they ? b. The emergence of CRM

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