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

Objectives and applicability of 1948s factories act, What are the objective...

What are the objectives and applicability of 1948s Factories Act? Objectives and applicability of 1948s Factories Act: The Factories Act controls the conditions of work a

Research topic, please help me choosing a desertation topic

please help me choosing a desertation topic

What is free rein or laissez faire in leadership, What is free rein or lais...

What is free rein or laissez faire in leadership? Free Rein or Laissez Faire: • Leadership leaves subordinates completely to themselves for task achievement. • Exercis

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

Explain assumptions underlying organisational development, Question 1: ...

Question 1: (a) Describe the philosophy and associated implications of the Harvard model of Human Resource Management (HRM) for managing people in the organization. Questio

Branch Manager, How to make a business plan for fmcg products and what are ...

How to make a business plan for fmcg products and what are the key points!

Planning, explain the steps in planning

explain the steps in planning

Meaning of hyper-competitive strategies, Explain Which of the following exp...

Explain Which of the following explanations best defines the meaning of hyper-competitive strategies? Ans) ? A) Hyper-competitive methods are about how to compete in fast changi

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

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