User Account

All Pages

Find the level of output at which atc is minimized

Assignment Help Business Economics
Reference no: EM132491910

Question 1: ?Mr Phill owns a farm that produces maize, his cost of production can be represented by the following cost function: 4000Q - 1600Q2 + 200Q3. Where Q is the quantity of maize produces in tons.

a) Find the level of output at which ATC is minimized.

b) How much TC, ATC, and MC will Mr Phill incur to produce at a cost minimizing output?

c) Given a Mr Phill's current level of capital and labour inputs, the marginal product of labour for his production is 3 units of output. If the marginal rate of technical substitution between capital and labour is 9, what is the marginal product of capital? Show your work.

Question 2: A manufacturing firm has a production function where its marginal rate of technical substitution is - K/L, the cost of labour is N$100, the cost of capital is N$50 and the total cost of production is N$500 000

a) Write the isocost equation of the firm and draw a well labelled isocost curve with labour on the horizontal axis and capital on the vertical axis, indicating the capital and labour intercepts

b) Calculate the slope of the isocost line?

c) What are the quantities of labour and capital representing the optimal resource allocation for the firm?

d) Show the optimal resource allocation in

c) on a fully labelled graph, with capital on the vertical axis.

Question 3: Mr Edward's farm employs two factors of input (labour and capital) to produce and its aim is to maximize profit.

a) Assume that Mr Edward is not employing a cost-minimizing combination of labour and capital, the MPL is 9 and the MPK is 3, wage rate is N$3 and the rental rate of capital is N$0.50. In your opinion, do you think it is sensible for Mr Edward to hire more labour and less of capital? Elaborate your answer.

b) Explain the meaning of the cost-minimization rule.

c) What will happen if he hires more labour and less capital? Elaborate in details.

Question 4: Hector Octagon makes t-shits. Their t-shirts are identical to the ones other manufacturers are making. Hector Octagon's daily cost information is as follows: TC = 100 + 20Q + 2Q 2 , the current market price for t-shirts is N$ 100 per t-shirt

a) How many t-shirts should Hector Octagon make to maximize their profit in a short run? Show your work.

b) How much profit will they make?

Reference no: EM132491910

Questions Cloud

Develop training to help prevent future violations of hr law : Imagine that you are an HR manager within that organization. You have been tasked with developing a training to help prevent future violations of the HR law.
Next creative breakthrough in business : What do you think the next creative breakthrough in business will be that will rival e-commerce and mobile phones in importance? (Loads of product planners
Droves of farmers making the tough decision to quit : At a desperate time for the dairy industry, with droves of farmers making the tough decision to quit, a determined Sunshine Coast couple is staking
Why the election could have significant effects on cash flow : Explain why threats of terrorism due to friction between two countries (the U.S. and Colombia) could possible affect your business, even though the terrorism
Find the level of output at which atc is minimized : Mr Phill owns a farm that produces maize, his cost of production can be represented by the following cost function: 4000Q - 1600Q2 + 200Q3.
Challenges that hr management may face in the future : Predict two (2) challenges that HR management may face in the future. Suggest one (1) strategy that HR management could use to mitigate these challenges.
Why ethical companies benefit from a lower cost of capital : Compare and contrast the internal rate of return approach to the net present value approach. Which is better? Support your answer with well-reasoned
What impact would you expect on exports : At the present moment, the United States has historically low interest rates. If these rates were to rise, what impact would you expect on exports
What are the advantagesof cultures becoming more similar : Whether you think the statement is true or false, briefly explain why you think the way you do. What are the advantages and disadvantages of cultures becoming.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd