A firm’s estimated long-run total cost function is LRTC = 160Q - .6Q2 + .002Q3. Suppose the firm is producing 100 units of output. The cost elasticity is ____ You can use Excel spreadsheet or otherwise to answer this question.
A firm’s estimated long-run total cost function is LRTC = 160Q - .6Q2 + .002Q3. Suppose the firm is producing 100 units of output. The cost elasticity is ____ You can use Excel spreadsheet or otherwise to answer this question.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 3MC
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1a) A firm’s estimated long-run total cost function is LRTC = 160Q - .6Q2 + .002Q3. Suppose the firm is producing 100 units of output. The cost elasticity is ____ You can use Excel spreadsheet or otherwise to answer this question.
- b) A research study published in Social Science Medicine, “Production Functions for General Hospitals,” estimated the following general hospital production function in the Netherlands: Q = 5*Staff.34*Beds.64*Drugs.04*Specialists.02, where Q is a measure used by the authors for patient care. Suppose a hospital currently utilizes the following inputs: Staff =20, Beds = 120, Drugs = 60, Specialists =10. Use a spreadsheet to find the following or otherwise. If the hospital increases its specialists by one (1), that is, employs an 11th specialist, the increase in Q (marginal product) will be:
- c) A study published in Social Science Medicine, “Production Functions for General Hospitals,” estimated the following general hospital production function: Q = 5*Staff.34*Beds.64*Drugs.04*Specialits.02, where Q is a measure used by the authors for patient care. If we increase all inputs by 1%, the percentage change in Q will be:
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