Page 3 of 16 2. Profit maximization for a manufacturing company: The production cost function for...
3. Consider a firm with the production function F(KL)=1/31/3 You will be solving the profit maximization for this firm with both the two step and I step methods and proving that the final answers are identical. This big problem is broken up into the following smaller parts: (a) Setup and solve the long run cost minimization problem for the long run optimal amount of capital K*(w,,9) and labor L*(w,r.9), and the long run minimized cost C*(w, 5,9). (Hint: reduce the...
The graphs of the revenue and cost functions for the production and sale of z units are shown below. The cost function is the straight line, and the revenue function is the curve. 77000 70000 63000 56000 49000 42000 35000 28000 21000 14000 0 0 100200 300 400 500 600 700 800 900 1000 1100 1200 a. Use the graph to estimate the production level z that maximizes profit. Use only values that appear on the horizontal axis for your...
248 PROFIT MAXIMIZATION (Ch. 20) 20.1 (0) The short-run production function of a competitive firm is given by f(L)62/3, where L is the amount of labor it uses. (For those who do not know calculus-if total output is al, where a and b are constants, and where L is the amount of some factor of production. then the marginal product of L is given by the formula abL- The cost per unit of labor is w-6 and the price per...
5. Consider a firm with the production function F(K.L)= \/1/5 Tou will be solving the profit maximization for this form with both the two step and 1 step methods and provine that the final answers are identical. This big problem is broken up into the following smaller parts: (a) Setup and solve the long run cost minimization problem for the long run optimal amount of capital K'(..) and labor L'(w. ), and the long run minimized cost C"(w.ne). (Hint: reduce...
In a simple accounting model, the profit that a manufacturing company earns on a product is equal to the revenue received from the sale of its products minus the total cost of producing the products Earnings Revenue-Costs Consider the situation in which a firm produces a single product which sells in the market for $52 The cost of producingx units of this product during a given period of time has been determined to be approximately C()-x24x + 160 If the...
1. [30 POINTS] Consider the production function y=f(L,K) = 4/1/2K1/4 where L is labor and K is capital. Price per unit of the labor is w, price per unit of the capital is r, and the price per unit of the output is p. (a) (10 POINTS] In long-run, if the firm's objective is to maximize its profit, what are the factor demand functions of labor and capital? (b) (10 Points) What is the optimal output level y and the...
Suppose that for a company manufacturing calculators, the cost revenue and profit equations are given by C=70,000 - 48x, R=2004 P-R-C where the production outoutin 1 week axcalator production is increasing at a rate of 600 tons per production putas.000 de efic i os A) Costs are (Simplify your answer.) at the rate of per week at this production level Enter your answer in the answer box and then click Check pang
4) A company's Cost function is: C=8x2-50x +103, Revenue function is: R=4x2+3. (Profit=R-C) Find the Profit equation: a. b. Find the break-even points: ( _) U c. Find the Profit intercept: (_ d. Find the max profit (Vertex): ( e. Sketch a Graph f. Domain: g. Range: h. Find the intercepts if the company wants a Profit of $200. L.), 8) Cost = x2+2x+1, Revenue = -5x2+6x-10 Profit 9) Cost = 7x2–7x+7, Revenue = 4x2+7x+7 Profit 10) Solve the Quadratic...
Number 3 please 1. Diaw some Boquants for this production function (1.2) = min {x1 + x2, 2x2). (6 points) 2. Consider this production function f(x1,x2) = x, + x,. Does it exhibit decreasing, constant, or increasing returns to scale? (6 points) 3. A competitive firm has the production function y=Z, where y is the quantity of output and Z the amount of labor used. (a) Suppose the hourly wage rate for labor is w = $10 and the price...
3. There are two firms that compete according to Cournot competition. Fim 1 has a cost func tion Cia1) 318. Firm 2 has a cost function C2()3. These firms cannot discriminate, so there is just one price that is determined by the aggregate demand. The inverse demand equation is P Q) 300-0 Where total supply 0-2 (a) Setup the profit maximization problem for firm 1 with all necessary equations plugged in. (2 point) (b) Solve firm I's profit maximization peoblem...