21. An oil transmission company uses only two inputs, pipelines and workers. Its output is the volume of oil transmitted (V), which is determined by the area of the cross section (3.14r2) and the length of pipeline (h). Thus, V = 3.14r¹h, where r is radius of the pipeline and h is the total length of the pipeline. The cost of building the pipeline depends on the surface area of the pipeline S, where S = 6.28th, which costs $100 per S. Besides, cost of hiring labour for managing the pipeline depends on the length of the pipeline, which costs $10 per h. A standard pipeline radius r is 0.5 metre. (a) If both r and h double, output (V) will increase by how much? (b) If both r and h double, total cost (C) will increase by how much? (c) Based on (a) and (b), are there economies of scale?
21. An oil transmission company uses only two inputs, pipelines and workers. Its output is the volume of oil transmitted (V), which is determined by the area of the cross section (3.14r2) and the length of pipeline (h). Thus, V = 3.14r¹h, where r is radius of the pipeline and h is the total length of the pipeline. The cost of building the pipeline depends on the surface area of the pipeline S, where S = 6.28th, which costs $100 per S. Besides, cost of hiring labour for managing the pipeline depends on the length of the pipeline, which costs $10 per h. A standard pipeline radius r is 0.5 metre. (a) If both r and h double, output (V) will increase by how much? (b) If both r and h double, total cost (C) will increase by how much? (c) Based on (a) and (b), are there economies of scale?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please answer each sub-question, and make sure your answer is correct!
![21. An oil transmission company uses only two inputs, pipelines and workers. Its
output is the volume of oil transmitted (V), which is determined by the area of the
cross section (3.14r2) and the length of pipeline (h). Thus, V = 3.14r¹h, where r is
radius of the pipeline and h is the total length of the pipeline. The cost of building
the pipeline depends on the surface area of the pipeline S, where S = 6.28th,
which costs $100 per S. Besides, cost of hiring labour for managing the pipeline
depends on the length of the pipeline, which costs $10 per h. A standard pipeline
radius r is 0.5 metre.
(a) If both r and h double, output (V) will increase by how much?
(b) If both r and h double, total cost (C) will increase by how much?
(c) Based on (a) and (b), are there economies of scale?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5ac3ddfb-483a-4b6e-ba4e-b7a5ec9a7c0b%2F95889886-9915-4e2f-9bbd-563640e6f9c4%2Fmig484a_processed.png&w=3840&q=75)
Transcribed Image Text:21. An oil transmission company uses only two inputs, pipelines and workers. Its
output is the volume of oil transmitted (V), which is determined by the area of the
cross section (3.14r2) and the length of pipeline (h). Thus, V = 3.14r¹h, where r is
radius of the pipeline and h is the total length of the pipeline. The cost of building
the pipeline depends on the surface area of the pipeline S, where S = 6.28th,
which costs $100 per S. Besides, cost of hiring labour for managing the pipeline
depends on the length of the pipeline, which costs $10 per h. A standard pipeline
radius r is 0.5 metre.
(a) If both r and h double, output (V) will increase by how much?
(b) If both r and h double, total cost (C) will increase by how much?
(c) Based on (a) and (b), are there economies of scale?
![21. An oil transmission company uses only two inputs, pipelines and workers. Its
output is the volume of oil transmitted (V), which is determined by the area of the
cross section (3.14r2) and the length of pipeline (h). Thus, V = 3.14r¹h, where r is
radius of the pipeline and h is the total length of the pipeline. The cost of building
the pipeline depends on the surface area of the pipeline S, where S = 6.28th,
which costs $100 per S. Besides, cost of hiring labour for managing the pipeline
depends on the length of the pipeline, which costs $10 per h. A standard pipeline
radius r is 0.5 metre.
(a) If both r and h double, output (V) will increase by how much?
(b) If both r and h double, total cost (C) will increase by how much?
(c) Based on (a) and (b), are there economies of scale?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5ac3ddfb-483a-4b6e-ba4e-b7a5ec9a7c0b%2F95889886-9915-4e2f-9bbd-563640e6f9c4%2F7cyka8_processed.png&w=3840&q=75)
Transcribed Image Text:21. An oil transmission company uses only two inputs, pipelines and workers. Its
output is the volume of oil transmitted (V), which is determined by the area of the
cross section (3.14r2) and the length of pipeline (h). Thus, V = 3.14r¹h, where r is
radius of the pipeline and h is the total length of the pipeline. The cost of building
the pipeline depends on the surface area of the pipeline S, where S = 6.28th,
which costs $100 per S. Besides, cost of hiring labour for managing the pipeline
depends on the length of the pipeline, which costs $10 per h. A standard pipeline
radius r is 0.5 metre.
(a) If both r and h double, output (V) will increase by how much?
(b) If both r and h double, total cost (C) will increase by how much?
(c) Based on (a) and (b), are there economies of scale?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education