1. Cost minimization: theoretically, an alfalfa producer would like to minimize their costs of producing any amount of alfalfa, q, by selecting the amount of labor, x1, fertilizer, x2, and equipment, 23. Technically efficient production requires q = 10x0.5x2x2. (a) [ What are the marginal products of labor and fertilizer? (b) [ What are the output elasticities? (c) (d) What is the elasticity of scale? s Suppose the per-unit fertilizer cost equals that for equipment (w2w3). Define the cost function in terms of the cost of labor, w₁, the cost of fertilizer, w2, the cost of equipment, w3, and the output, q- (e) I Find 1, 2, and c when w₁ = 1, W2 = w3 = 2, and q = 20.

1. Cost minimization: theoretically, an alfalfa producer would like to minimize their costs of producing any amount of alfalfa, q, by selecting the amount of labor, x1, fertilizer, x2, and equipment, 23. Technically efficient production requires q = 10x0.5x2x2. (a) [ What are the marginal products of labor and fertilizer? (b) [ What are the output elasticities? (c) (d) What is the elasticity of scale? s Suppose the per-unit fertilizer cost equals that for equipment (w2w3). Define the cost function in terms of the cost of labor, w₁, the cost of fertilizer, w2, the cost of equipment, w3, and the output, q- (e) I Find 1, 2, and c when w₁ = 1, W2 = w3 = 2, and q = 20.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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