A cost minimizing firm with q = K¹/2¹/2 that produces q = 40 pays w = 8 and r = 2. Provide an Isoquant and Isocost Diagram to illustrate and quantify this firm's choices for capital and labour as Bundle A. b. Next month the firm will reduce output to q = 20. In the short-run, Bundle B, the firm cannot change capital. In the long run, Bundle C, both capital and labour are variable. Update your diagram with calculated values for Bundles B and C.

A cost minimizing firm with q = K¹/2¹/2 that produces q = 40 pays w = 8 and r = 2. Provide an Isoquant and Isocost Diagram to illustrate and quantify this firm's choices for capital and labour as Bundle A. b. Next month the firm will reduce output to q = 20. In the short-run, Bundle B, the firm cannot change capital. In the long run, Bundle C, both capital and labour are variable. Update your diagram with calculated values for Bundles B and C.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 6P

See similar textbooks

Similar questions

A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm’s production function is: X=-0.2L3 + 18L2 + 1620L. Where X is the number of units of the product per week, and L is the number of persons employed. A t what weekly output is marginal cost equal to average variable cost? if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
QUESTION 27 Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. Units of capital 80 C 36 60 A 0 Figure 7.8 B D 60 80 Units of labor 120 Refer to Figure 7.8. If the price of capital is $30, then along isocost line AB total cost is $1,200. $1,800. $2,400. indeterminate from this information, as the price of labor is not given.
- Refer to the information provided in Figure below to answer the question(s) that follow. Units of capital 80 60 A 0 B_D 60 80 120 Units of labor 1) Refer to Figure If the price of capital is $20, then along isocost line AB total cost is 2) Refer to Figure The firm is currently along isocost CD. If the price of capital is $10, then the price of labor is
8
Needing help please
A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable. Identify the stages of production in the diagram and explain why the firm still hire labour even though it is in the range of diminishing returns. What is the number of workers after which diminishing marginal returns starts? Is this a short run or long run phenomenon? Labour (units) 1 2 3 4 5 6 7 8 9 Total Product (TP) in Units 8 15 24 30 35 37 38 38 36 Average Product (AP) in units 8 7.5 8 7.5 7 6.17 5.43 4.75 4 Marginal Product (MP) in units 8 7 9 6 5 2 1 0 -2
Consider the following diagram showing a range of isoquants and isocosts, with labour measured on the horizontal axis and capital measured on the vertical axis. Assume that when the firm is producing in the short run, capital is fixed at K but capital is variable in the long run. K, Capital K A B Q3 Isoquant Q2 Isoquant Q₁ Isoquant L, Labour Which of the following can we conclude? O Only point B represents cost minimisation in both the short run and the long run, as it is on the short run expansion path, as well being the cost minimising point in the long run. Points A, B and C represent cost minimisation in the long run only. There are no points that represent cost minimisation in both the short run and the long run. Points A, B and C represent cost minimisation in both the short run and the long run. Points D and E represent cost minimisation in the short run only. Points A, B and C represent cost minimisation but only in the short run. Points D and E represent cost minimisation in…
The graph below shows a firm's isoquant for output q = 30. Initially the firm produces at point A, where it employs 20 units of physical capital ("machines") and 45 workers. 90 K 80 70 60 50 40 30 20 10 0 0 10 20 30 40 50 60 70 80 90 The firm must pay $6 for each unit of physical capital it uses, and it pays $24 for each unit of labor it employs. a. Draw the firm's isocost line through point A. b. Calculate the firm's total production cost and its average total cost at point A. Show your work. c. Given the costs of capital and labor, how can we tell that point A is not the long-run profit-maximizing input mix for the firm when it produces 30 units of output? Starting at point A, does the firm want to use more labor or more capital? Explain. d. What would be the firm's long-run optimal input mix, given that it produces 30 units of output? (You might not be able to identify the optimal mix exactly, but use the graph to estimate it as best you can.) Mark the optimal input mix as point B…
I need help with #33 please
do fast all answer.
Economics The company A produces cars using three inputs, labour (L), capital (K)and talent (X). ACME's production function is Y(X, L, K) - х0.5LO.25к0.25 This problem only deals within the short run, where ACME's amount of capital is fixed at K = 9. Denote by w the labour wage, by r the price of capital and by q the price of talent. a) Find A's conditional input demand for talent and labour. b) Find A's cost function. What is its shutdown price (as a function of w, rand q)? c) Find A's short run supply function. Draw it together with any other curves. -х0.5L0.25 к0.25 %3D
The fast food company Schnabb uses labor and capital to produce its product. Holding the production fixed, what is the effect of a lower price of capital on the ratio between the number of workers and the amount of capital used? Explain using isocosts and an isoquant.