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A firm faces the following costs: total cost of capital = $6,000; price paid for labor = $30 per labor unit; an price paid for raw materials = $8 per raw-material unit. Initially, the firm can produce 4,000 units of output by combining its fixed capital with 150 units of labor and 600 units of raw materials. After the firm improve its production process, it can produce 5,000 units of output by combining its fixed capital with 50 units of labor and 500 units of raw materials. How will the firm's total costs change as a result of the improved production process? Instructions: Enter your answers as a whole number. Total cost changes from $ using the original process to $ using the improved process.

A firm faces the following costs: total cost of capital = $6,000; price paid for labor = $30 per labor unit; an price paid for raw materials = $8 per raw-material unit. Initially, the firm can produce 4,000 units of output by combining its fixed capital with 150 units of labor and 600 units of raw materials. After the firm improve its production process, it can produce 5,000 units of output by combining its fixed capital with 50 units of labor and 500 units of raw materials. How will the firm's total costs change as a result of the improved production process? Instructions: Enter your answers as a whole number. Total cost changes from $ using the original process to $ using the improved process.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A firm faces the following costs: total cost of capital = $6,000; price paid for labor = $30 per labor unit; and price paid for raw materials = $8 per raw-material unit. Initially, the firm can produce 4,000 units of output by combining its fixed capital with 150 units of labor and 600 units of raw materials. After the firm improves its production process, it can produce 5,000 units of output by combining its fixed capital with 50 units of labor and 500 units of raw materials. How will the firm's total costs change as a result of the improved production process? Instructions: Enter your answers as a whole number. Total cost changes from $ using the original process to $ using the improved process.
Transcribed Image Text:A firm faces the following costs: total cost of capital = $6,000; price paid for labor = $30 per labor unit; and price paid for raw materials = $8 per raw-material unit. Initially, the firm can produce 4,000 units of output by combining its fixed capital with 150 units of labor and 600 units of raw materials. After the firm improves its production process, it can produce 5,000 units of output by combining its fixed capital with 50 units of labor and 500 units of raw materials. How will the firm's total costs change as a result of the improved production process? Instructions: Enter your answers as a whole number. Total cost changes from $ using the original process to $ using the improved process.
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