What is the firm marginal cost

Assignment Help Business Economics
Reference no: EM131090339

Suppose a firm’s production function is given by Q = L1/2*K1/2. The Marginal Product of Labor and the Marginal Product of Capital are given by: MPL =(K^1/2)/(2L^1/2) , and MPK =(L^1/2)/(2K^1/2) . a) Suppose the price of labor is w = 25, and the price of capital is r = 4. Derive the firm’s total cost function. b) What is the firm’s marginal cost? c) For this problem, you will sketch the graph of the firm’s isoquant for Q = 10 units of output, and on the same graph sketch the firm’s isocost line associated with the total cost of producing Q = 10 units of output. For the isoquant, clearly identify 4 combinations of Labor and Capital that will produce Q = 10 (including the bundle that minimizes the firm’s cost of production).

Reference no: EM131090339

Questions Cloud

Suppose trevor hires workers to cook hamburgers : Suppose trevor hires workers to cook hamburgers. If the first worker's marginal product is 6 hamburgers, the second worker's marginal product is 21, and the third worker's marginal product is 20, then the average product of labor is _____ hamburgers.
Relationship between resource dependence-economic growth : There is a robust negative relationship between resource dependence (resource production relative to GDP) and economic growth. List 3 potential explanations for this counter-intuitive result.
Bundled maintenance contract for periodic repairs : When Kodak leased large photocopiers to businesses, they also bundled a maintenance contract for periodic repairs. Third-party repair firms claimed that Kodak violated antitrust laws because this bundle guaranteed Kodak a monopoly on repairs and excl..
What is this investment internal rate of return : Nancy's Notions pays a delivery firm to distribute its products in the metro area. Delivery costs are $36,000 per year. Nancy can buy a used truck for $7,000 that will be adequate for the next 3 years. What is this investment's internal rate of retur..
What is the firm marginal cost : Suppose a firm’s production function is given by Q = L1/2*K1/2. The Marginal Product of Labor and the Marginal Product of Capital are given by: MPL =(K^1/2)/(2L^1/2) , and MPK =(L^1/2)/(2K^1/2). Suppose the price of labor is w = 25, and the price of ..
Aggregate supply and demand with upward sloping sras curve : Why does the SRAS slope upward to the right. What exogenous force determines the overall position of this upward sloping curve on the graph? Show how this decision would affect the SRAS, price level and income level on your graph from the short run i..
Economy has marginal propensity to consume : Your economy has a marginal propensity to consume (MPC) of 0.70. It is currently operating at a level at less than full employment. Prices appear to be sticky in this economy, but by some lucky stroke the rate of interest falls. Using the Keynesian C..
Define strategic competitiveness and above-average returns : Define strategic competitiveness and above-average returns. What is the relationship between strategic competitiveness and returns on investment? Explain why it is important for organizations to analyze and understand the external environment. Descri..
Outside of residential investment and on real interest rate : Assume changes in regulation make it easier for households to get mortgages from banks. Seeing this, firms find it more profitable to build more houses, so residential investment increases. What effect do you think this might have on investment outsi..

Reviews

Write a Review

Business Economics Questions & Answers

  Six abbreviated bulleted items

Include no more than six abbreviated bulleted items for each slide in approximately 24-point font. The title slide content should include the title of the assignment, your name, your professor's name, the course title, and the date.

  Number of jobs increase or decrease

Compute the new equilibrium wage and the new number of jobs. Will the number of jobs increase or decrease.

  Explain how to get the producer surplus

Explain how to get the producer surplus. What about the area that lies beneath the x-axis.

  What is the future worth in sallys savings account

Sally deposited $100 a month in her savings account for 24 months. For the next five years she made no deposits. What is the future worth in Sally’s savings account at the end of seven years, if the account earned 6% annual interest, compounded month..

  Decreasing the share of recreation and education

Statistics Canada has recently adjusted the CPI basket of goods and services by increasing the share of shelter in total expenditure from 25.7 to 27.5 percent, and decreasing the share of recreation, education, and reading from 13 to 11.8 percent. Wh..

  Higher wages-automobile insurance becomes less expensive

Using carefully labelled demand and supply diagrams, show the impacts on equilibrium price and quantity in the following situations: New cars are normal goods. What will happen to the equilibrium price and quantity of new cars if the price of gasolin..

  Show the effect of business cycle on inflation

Show the effect of Business Cycle on Inflation. Show the effect of Business Cycle on unemployment. Show the relationship between employment, inflation and business cycle

  How many units of consumption goods will be produced

An individual derives utility from consumption goods, X, and leisure time, N, to maximize the daily utility level, u = XN. Outside income per day is $m and the price of consumption goods is $p.  How many units of consumption goods will be produced?

  What proportion of investment is private saving

Show that the value of GDP at the point of spending balance is 6,000 billion. What proportion of investment is private saving? Government saving? Saving by the rest of the world?

  Businesses create value by integrating the production

Explain how businesses create value by integrating the production and distribution of goods, services, and information.

  Context of the economic concepts and business strategies

Evaluate each of these three options in the context of the economic concepts and business strategies we have learned in the course and explain how you would deal with this situation - Is this consistent with profit-maximization? Given the current h..

  Compute the opportunity costs for producing a single twinkie

Compute the opportunity costs for producing a single Twinkie and a single cupcake for Jasper and for Jasmine. Does either have an absolute advantage in the production of Twinkies.

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