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

Why is policy advocacy important, QUESTION 1 (a) Distinguish between po...

QUESTION 1 (a) Distinguish between policy analyses and policy advocacy. (b) Why is policy advocacy important? (c) Why is it questionable that policy analysis can ever "so

How is the hardworking important for an entrepreneur, How is the hardworkin...

How is the hardworking important for an entrepreneur? Hardworking: Usually they are called workaholics. Here for work, is worship for then. They place in continuous effor

Improve industrial relations in the company, Question: (a) You have bee...

Question: (a) You have been appointed as the Human Resource Manager of BPO Ltd and the Chief Executive Officer has requested you to propose measures to improve industrial relat

High-context culture and low-context culture, QUESTION 1 Both encoding ...

QUESTION 1 Both encoding and decoding of messages lay traps for the unwary intercultural communicators (Hall, 1959 - The Silent Language). Using appropriate examples, discuss t

Case study, List some scientific decision aids that you may prescribe to im...

List some scientific decision aids that you may prescribe to improve the situation.ion

Describe how an organization can assess its service quality, Question 1: ...

Question 1: (a) Total Quality Management (TQM) is an approach to improving the effectiveness and flexibility of a business as a whole (Oakland, 1989). Discuss three of the co

Target Market Basis, what is Size of Customer, Type of Customer And Need fo...

what is Size of Customer, Type of Customer And Need for Service?

Stages in organizational development, Organizational development is a proce...

Organizational development is a process a workplace a group of people and their growth and development. Not only one's growth will matter but both the organization as well as the p

Describe the different e-business concepts, QUESTION 1 (a) Describe the...

QUESTION 1 (a) Describe the 5 main E-Business Models (b) An important step in developing an E-business strategy is to evaluate the E-Business implementation strategy. Descri

Define the term quality control in management, Define the term Quality Cont...

Define the term Quality Control in management. Quality Control: Control is a system for checking and measuring (inspecting) a phenomenon. This suggests while to inspect,

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