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We can generally demonstrate a relationship between scale elasticity and the slope of the average cost...
We can generally demonstrate a relationship between scale elasticity and the slope of the average cost...
We can generally demonstrate a relationship between scale elasticity and the slope of the average cost curve. Here, we'll demonstrate the result for only one input. Consider a (continuously differentiable and strictly increasing) production function F(L), where L denotes labor. 4. e) letting w denote the wage rate for labor, we can note that t f is cwL, q F(L) where L is the amount of labor necessary to produce q units of output, i.e. so that What is the...
Basic microeconomics Reproduce the relationship and explain it a-d)
3. Assume a company that uses the production factors K and L, i.e. the production function is q = F(K,L).a) In the short run, K is constant while L is variable. An expression of the marginal cost is MC = ∆V C ∆q We also know that V C = wL if L is the only variable factor and the salary is w. This means that ∆V C = w∆L. From this information, one can get an expression of the relationship...
In the short-run, we assume that capital is a fixed input and labor is a variable...
In the short-run, we assume that capital is a fixed input and labor is a variable input, so the firm can increase output only by increasing the amount of labor it uses. In the short-run, the firm's production function is q =f(L,K), qs8LK + 3L2-1.3 where q is output, L is workers, and K is the fixed number of units of capital. What is the marginal product of labor as a function of L and K? MPL=/ -(Properly format your...
only number 5 Write an expression of the marginal cost function MC. Estimate the effect on...
only number 5
Write an expression of the marginal cost function MC. Estimate the effect on TC about by 2 units decrease in from the current output level of 15 units. 5) A firm's short-run production function is given by Q = 50L -.0212 Where L denotes the number of workers. 1. Find the size of the workforce that maximizes output. 2. Find marginal product of labor (MPL) 3. Find the average product of labor (APL) 4. Find the size...
6) (4 points)The Longheel Press produces memo pads in its local shop. The company can rent...
6) (4 points)The Longheel Press produces memo pads in its local shop. The company can rent its equipment and hire workers at competitive rates. Equipment needed for this operation can be rented at $54 per hour, and labor can be hired at $12 per worker hour. The company has allocated $96,000 for the initial run of memo pads. The production function can be expressed as: Q = 0.25K0.25L0.75, where Q represents memo pads (boxes per hour), K denotes...
1. Consider the figure below illustrating an isoquant and isocost line for the ABC Fruit Company's...
1. Consider the figure below illustrating an isoquant and isocost line for the ABC Fruit Company's production of guavas: x 6 a. [2 pts] Given the isocost line shown above, if the wage rate (w) is 2 and total cost is 12, what is the price of capital, r? b. [5 pts) Suppose that the marginal product of labor (MPL) = 6 and the marginal product of capital (MPK) = 3 at point A in the figure. At point B,...
Question #3 (this involves the idea of labor and capital) PLEASE TYPE OUT THE ANSWER A...
Question #3 (this involves the idea of labor and capital) PLEASE TYPE OUT THE ANSWER A firm produces output using the technology: Q = 5K0.33L0.5 where capital, K, is measured in machine-hours, labor, L, is measured in person-hours, and Q denotes the yearly output. The hourly wage rate in the United States WL = $10, and the hourly rental rate of capital (IN EFFECT CAPITAL COSTS $2 PER MACHINE HOUR) is WK = 2 and the Price is $10. Does...
All firms produce according to a Cobb-Douglas production function. This production function should look familiar to...
All firms produce according to a Cobb-Douglas production function. This production function should look familiar to you. It says that output Q is related to inputs K and L as: This production function implies that the cost-minimizing demand for capital will be Ou where w is the wage rate, r is the cost of capital, Q is output level, and α and β are parameters We will assume that α + β 1; this is the constant-returns-to-scale assumption we saw...
3. (27 Points) Charlie likes to make candy at his factory, but needs two inputs: (1)...
3. (27 Points) Charlie likes to make candy at his factory, but needs two inputs: (1) Labor in the form of OompaLoompas, which we denote with L, and (2) Capital which we denote with K. The production function is y = (L? + K3)2 (f) In the long run, Charlie can alter his choice of Capital – in this case, what would the optimal input bundles be as a function of y, wl, and wk? In other words, what are...
b) How much output should the monopolist produce in order to maximize profit? c) How much...
b) How much output should the monopolist produce in order to
maximize profit?
c) How much labor should the firm hire to produce this
output?
d) How Much Capital should the firm hire?
e) What price should the monopolist charge?
f) What is the deadweight loss?
g) What is the Price Elasticity of Demand at the
profit-maximizing price and quantity?
3. Suppose a monopolist has a production function given by Q = L12K12. Therefore, L2 MPL K2 2/12 , and...
We can generally demonstrate a relationship between scale elasticity and the slope of the average cost curve. Here, we'll demonstrate the result for only one input. Consider a (continuously differentiable and strictly increasing) production function F(L), where L denotes labor. 4. e) letting w denote the wage rate for labor, we can note that t f is cwL, q F(L) where L is the amount of labor necessary to produce q units of output, i.e. so that What is the...
In the short-run, we assume that capital is a fixed input and labor is a variable input, so the firm can increase output only by increasing the amount of labor it uses. In the short-run, the firm's production function is q =f(L,K), qs8LK + 3L2-1.3 where q is output, L is workers, and K is the fixed number of units of capital. What is the marginal product of labor as a function of L and K? MPL=/ -(Properly format your...
only number 5
Write an expression of the marginal cost function MC. Estimate the effect on TC about by 2 units decrease in from the current output level of 15 units. 5) A firm's short-run production function is given by Q = 50L -.0212 Where L denotes the number of workers. 1. Find the size of the workforce that maximizes output. 2. Find marginal product of labor (MPL) 3. Find the average product of labor (APL) 4. Find the size...
1. Consider the figure below illustrating an isoquant and isocost line for the ABC Fruit Company's production of guavas: x 6 a. [2 pts] Given the isocost line shown above, if the wage rate (w) is 2 and total cost is 12, what is the price of capital, r? b. [5 pts) Suppose that the marginal product of labor (MPL) = 6 and the marginal product of capital (MPK) = 3 at point A in the figure. At point B,...
All firms produce according to a Cobb-Douglas production function. This production function should look familiar to you. It says that output Q is related to inputs K and L as: This production function implies that the cost-minimizing demand for capital will be Ou where w is the wage rate, r is the cost of capital, Q is output level, and α and β are parameters We will assume that α + β 1; this is the constant-returns-to-scale assumption we saw...
3. (27 Points) Charlie likes to make candy at his factory, but needs two inputs: (1) Labor in the form of OompaLoompas, which we denote with L, and (2) Capital which we denote with K. The production function is y = (L? + K3)2 (f) In the long run, Charlie can alter his choice of Capital – in this case, what would the optimal input bundles be as a function of y, wl, and wk? In other words, what are...
b) How much output should the monopolist produce in order to
maximize profit?
c) How much labor should the firm hire to produce this
output?
d) How Much Capital should the firm hire?
e) What price should the monopolist charge?
f) What is the deadweight loss?
g) What is the Price Elasticity of Demand at the
profit-maximizing price and quantity?
3. Suppose a monopolist has a production function given by Q = L12K12. Therefore, L2 MPL K2 2/12 , and...
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