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

Marketing, give a full report on the tactics and strategy on a start up bus...

give a full report on the tactics and strategy on a start up business

Describe the likely features of the proposed corporate, Briefly describe th...

Briefly describe the likely features of the proposed corporate website if it is to be comparable to the best in the industry. The likely features of the proposed corporate web

Useful of Management in business sectors, Management is Really useful fo...

Management is Really useful for decesion making if your statement is true then comment !how?

Appraisal and failure model for measuring quality costs, QUESTION (a) E...

QUESTION (a) Explain the Prevention, Appraisal and Failure model for measuring quality costs (b) The Quality Manager has provided you with the following information and has

M.COM, What are the rationale of transfer of technology? Describe various n...

What are the rationale of transfer of technology? Describe various non-equity forms of technology transfer by TNCs and Small and Medium Enterprises

Describe the key steps conducting an effective presentation, QUESTION 1 ...

QUESTION 1 Being able to deliver a stunning presentation has become increasingly important in the development of a successful managerial career. Based on your own experience

What is email?, QUESTION With the popularity of the Internet and its gl...

QUESTION With the popularity of the Internet and its global acceptance as a business tool, the company is thinking firmly of providing email addresses and internet access to al

Ability diversity, Individual with disabilities are an under utilized human...

Individual with disabilities are an under utilized human resources. Many organisations, today, are hiring people with disabilities and provide them opportunities to unleash their t

Test markiting, various approches in test marketing.

various approches in test marketing.

Effective performance appraisal system, Problem 1: (a) What are the fe...

Problem 1: (a) What are the features of an effective performance appraisal system? (b) Discuss the advantages and disadvantages of performance appraisal systems? Proble

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