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

Telemarketing, Telemarketing: Telemarketing is an significant part of ...

Telemarketing: Telemarketing is an significant part of various businesses. However, some companies train people to do it properly. Effective telemarketing includes all of your

Ethical Organisational Management, Evaluate factors which could influence o...

Evaluate factors which could influence organisational ethics.

Describe the meaning of hyper-competitive strategies, Hyper-competitive str...

Hyper-competitive strategies admit the bases of competitive benefit may not be sustainable and that disruption of the status quo may be significant.

What do you understand by the term kinesics, QUESTION 1 (a) Examine cri...

QUESTION 1 (a) Examine critically the three major barriers to inter-cultural communication. (b) Explain how these barriers could be eliminated due to a better understanding

Who is an entrepreneur, Who is an entrepreneur? An entrepreneur is a pe...

Who is an entrepreneur? An entrepreneur is a person who is capable to express and carry out the urge; skill, innovative and motivation capability to establish a business or ind

Explain the characteristics of a traditional society, Question 1 Explai...

Question 1 Explain the four assumptions made by modernization theory about the process of social change in the Third World. Give your own examples to explain your discussion.

Explain how you would write a scientific grant, Question 1: a) Your su...

Question 1: a) Your supervisor and you have different expectations and you start to realise that poor communication is getting in the way of your progress. Discuss strategi

Sale management, state the reasons why you choose marketing as a profession...

state the reasons why you choose marketing as a profession

Identify tools which used to impact planning, It is an imperative that when...

It is an imperative that when formulating Operational plans the environments in which the business operates in are considered, identify the environments and the tools used to analy

Modern concept of total quality management, It has been realized that ins...

It has been realized that inspection alone cannot build quality into a product unless quality has been designed and manufactured into it. Therefore quality awareness must be

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