A firm producing hockey sticks has a production function given by q = 2vkl In the short run, the firm's amount of capital equipment is fixed at k = 100. The rental rate for k is r = 5, and the wage rate for r = $1, and the wage rate for l is w = $4. (a) Calculate the firm's short-run total cost curve. Calculate the short-run average cost curve. (b) What is the firm's short-run marginal cost function? What are the SC, SAC, and SMC for the firm if it produces 25 hockey sticks? Fifty hockey sticks? One hundred hockey sticks? Two hundred hockey sticks? (c) Graph the SAC and the SMC curves for the firm. Indicate the points found in part (b). 2.
A firm producing hockey sticks has a production function given by q = 2vkl In the short run, the firm's amount of capital equipment is fixed at k = 100. The rental rate for k is r = 5, and the wage rate for r = $1, and the wage rate for l is w = $4. (a) Calculate the firm's short-run total cost curve. Calculate the short-run average cost curve. (b) What is the firm's short-run marginal cost function? What are the SC, SAC, and SMC for the firm if it produces 25 hockey sticks? Fifty hockey sticks? One hundred hockey sticks? Two hundred hockey sticks? (c) Graph the SAC and the SMC curves for the firm. Indicate the points found in part (b). 2.
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.4P
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