5. Selpats produces pens with the production function f(k, l) = 200vkl. The price ofcapital is wk = 40 and the price of labor is wL = 10.(i) Determine the optimal input bundle for producing y pens in the long run and find thelong-run cost function.(ii) Determine the optimal input bundle for producing y = 10,000 pens in the long run.(iii) Now suppose that capital is fixed at k = 25 in the short run. Find the short-run totalcost function and the short-run marginal cost function. Explain the relationship betweenthe short-run and long-run marginal costs when y = 10,000.(iv) Suppose that the price of output is p. Which value of y maximizes short-run profit?р.

Given production function Y=200KLPrice of Capital=40Price of Labor=10

Answered: 5. Selpats produces pens with the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the production function is given by f(K,L) = 3Kl, where K denotes capital and L denotes labor. The price of capital is 2 TL/machine-hr, the price of labor is 24 TL/person-hr, and capital is fixed at 4 machine-hr in the short run. a) Find the short-run TC, TVC, and TFC curves for this production process. Sketch them on a single graph. Do not forget to label all axes and necessary points on your graph. b) Find short-run ATC, AVC, AFC, and MC curves for this production process. Sketch them on a single figure. Do not forget to label all axes and necessary points on your graph.
V1
Please type the answer, and answer both questions.
Suppose a brewery uses a Cobb-Douglas production function for his production. He studies the production process and finds the following. An additional machine-hour of fermentation capacity would increase output by 600 bottles per day (i. e. MPK = 600). An additional man-hour of labor would increase output by 1200 bottles per day (i. e. MP₁ = 1200). The price of a man-hour of labor is $40 per hour. The price of a machine-hour of fermentation capacity is $8 per hour. 1. Is the brewery currently minimizing its cost of production? Check using the minimization condition. 2. It turns out, the brewery is not optimally choosing the factors of production. To lower its production cost, which factor of production should the brewery increase and which factor should he decrease? 3. Suppose that the price of a machine-hour of fermentation capacity rises to $20 per hour. How does this change the answer from part 1?
1
Suppose that the production function for Hannah and Sam's home remodeling business is Q=f(L,K) Q=1040.2K0.3 Assume the wage rate is $8,000 per week and the cost of renting a unit of capital is $2,000 per week. a. What is the least-cost input combination for remodeling 100 square feet each week? Instructions: Round your answers to 2 decimal places. units of labor and units of capital. b. What is the total cost? Instructions: Round your answer to 2 decimal places.
Let us consider the cost implications of the short-run production schedule from assignment number 7, where capital was fixed at 2 units of capital. Labor: 0 1 2 3 4 5 6 7 8 9 Output: 0 6 24 60 120 170 210 240 260 270 In this scenario, since we only have two inputs (Capital and Labor), and since the amount of capital is fixed, the cost of total cost capital would also be Total Fixed Cost (TFC) and since labor is variable, the total cost of labor would be Total Variable Cost (TVC). In that context, assume that the cost of capital is $40 per unit per period, while the cost of labor (or wage rate) is also $30 per unit of labor per period. (a) Use this information set up a diagram (using excel) that shows total cost (TC) and total variable cost (TVC) of the firm per period in the short run with the level of output on the horizontal axi
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1. Given the production function: q = 2KL, (a) Fill in the table below which has information on the short-run production function, the marginal product of labor (MPL), and the average product of labor (APL) if capital is held fixed at 3 units in the short-run. Labor Quantity of Output (MPL) (APL) 0 1 4 9 16 25 (b) Plot the short-run production function. (c) Plot the marginal and average products of labor on a new graph. (d) Does the law of diminishing marginal returns apply? If so, at what level of labor do diminishing marginal returns set in? (e) What is the relationship between the marginal product of labor (MPL) and the average product of labor (APL)? (f) If the amount of capital increased to 6 units, what would happen to your graphs in part C)?
Please answer fast please arjent help please ASAP pls answer fast
Looking at the following plot of a firm's production function, represented by isoquants for production levels and isocost lines for different total costs of production. Which of the following are true? 101 00 9 K, Capital per unit time Cost $38.80 2 Cost $18:40 6 L. Labour per unit time 10 Y Y 4 Y 2 a. Points a and b are each cost minimizing points for the firm at different levels of output. b. Point d will have higher output and lower total cost than point c c. Point e has less output than point b, but a higher total cost. d. The production function exhibits increasing returns to scale. e. It's clear that Point c does not correspond to a cost-minimizing bundle of inputs.
Please help solve for (b) what is long run cost in a?

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