Firm produces output using the production function

Assignment Help Business Economics

Reference no: EM131425945

Suppose that a firm produces output using the production function Q=0.5L + 1.5K, where L and K represent labor and capital inputs, respectively. Suppose that the cost of L is $10 a unit and the cost of K is $ 25 a unit.

a. What is the optimal bundle of inputs to purchase for production?

b. What would the cost be in terms of Q?

c. What is the marginal cost of production?

d. What would the market price of Q need to be per unit so that the firm could cover its ost be producing and selling this output?

Reference no: EM131425945

Questions Cloud

Elasticity of demand for the total breakfast cereal market : Would you expect the price elasticity of demand for a particular brand of breakfast cereal, such as “Wheaties,” to be higher or lower than the elasticity of demand for the total breakfast cereal market?

What is marys income elasticity of demand for subway rides : If the number of subway rides that Mary demands increases from 4 per week to 5 per week when her income increases from $50,000 to $75,000 per year, what is Mary’s income elasticity of demand for subway rides? What type of good are subway rides for Ma..

Find the equation of johns budget constraint : John Kelso, a magazine reporter from New York, is visiting Savannah, GA. Each Monday, John visits to the Savannah Cafe and spends $6 on Danishes and muffins. At the cafe, the price of a Danish is $1.20. The price of a muffin depends on the number of ..

Firm produces output using the production function : Suppose that a firm produces output using the production function Q=0.5L + 1.5K, where L and K represent labor and capital inputs, respectively. Suppose that the cost of L is $10 a unit and the cost of K is $ 25 a unit. What is the optimal bundle of ..

Advantageous for him to incorporate as a C-corporation : Mr. Bond who owns Spectre Road Construction Co. and runs it as a proprietorship, had a before-tax income last year of $140,000. His personal and family expenses are $50,000 and he has $10,000 in exemptions and deductions. If he paid himself a salary ..

What is the marginal cost of production for the firm : A firm produces Q with the production function Q=10k^2+10L^0.5, and K is fixed at 4 units. a. If the price of K is $5 and the price of L is $1, find the total cost of producing Q units of output? b. Using the same input prices, what is the marginal c..

Find the company total cost of producing output level Q : A small company uses input labor L to generate an output Q, and the production function is Q=0.25L^2. The cost of labor L is $4 a unit. Find the company's total cost of producing output level Q.

Elasticity problems : An increase in the price of hot dogs from $1.50 to $2.10 per pound increased the average number of burgers demanded per week from 300 to 360. Assuming that all other economic variables were held constant, what is the cross-price elasticity of demand ..

User Account

All Pages