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 the ethnocentrism, QUESTION 1 We do not understand people from ...

QUESTION 1 We do not understand people from other cultures as readily and intuitively as people from our own culture. But, cross cultural communication management helps organiz

Investment portfolio strategy, From your past investment portfolio strategy...

From your past investment portfolio strategy and your explanation to your client, outline the basis of your future portfolio for the same principal and indicate the rationale for y

Types of always better control analysis of inventory control, What are the ...

What are the groups of the inventories of Always Better Control Analysis of Inventory Control? The inventories are classified within three groups as illustrated below: • A-T

Time management wizard, Problem Organisations and individuals could der...

Problem Organisations and individuals could derive great benefits from an all-in-one Time Management Wizard. Although there exist various tools such as Calendars and Timesheets

Discuss any two ongoing management costs, a. Discuss any two ongoing manage...

a. Discuss any two ongoing management costs considered in financial analysis in BPO b. Explain any two pricing models to structure price of an outsourcing contract.

Supervion and Leadership, Ask quesSupervision and Leadership OBJECTIVE Pre...

Ask quesSupervision and Leadership OBJECTIVE Prepare thoughtful responses to essay questions about your results from the Leadership Behavior Questionnaire in your textbook. PURP

Define the term sustainable development, Question: (a) Define the term ...

Question: (a) Define the term sustainable development (b) What is environmental sustainability (c) What are the different steps involved in the development of an EIA for

Discuss the role of the wto, QUESTION 1 The World Trade Organization (W...

QUESTION 1 The World Trade Organization (WTO) deals with the rules of trade between nations at a global or near-global level. Discuss the role of the WTO in promoting internati

Cadbury dairy milk, cadbury dairy milk'' online value proposition

cadbury dairy milk'' online value proposition

Business analytics assignment, Hey I need help with the Part 3 of my busine...

Hey I need help with the Part 3 of my business analytics assignment

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