Abrewery produces regular beer and a lower-carbohydrate "light" beer Steady customers of the brewery buy 10 units of regular beer and 15 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $29,000 and the cost per unit of light beer is $50,000. Every unit of regular beer brings in $200,000 in revenue, while every unit of light beer brings in $500,000 in revenue. The brewery needs at least $15.000.000 in revenue, and has determined that the total demand will be at least 48 units of beer Complete parts (a) and (b) GITTE (a) How much of each type of beer should be made so as to minimize total production costs? units of light beer should be made, for a minimum total cost of $ units of regular beer and (Type integers or decimals) (b) Suppose the minimum revenue is increased to $15.700.000 Use shadow costs to calculate the total production cost The shadow cost of production is $ The increased minimum revenue corresponds to a total production cost of $ (Type integers of decimals

Abrewery produces regular beer and a lower-carbohydrate "light" beer Steady customers of the brewery buy 10 units of regular beer and 15 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $29,000 and the cost per unit of light beer is $50,000. Every unit of regular beer brings in $200,000 in revenue, while every unit of light beer brings in $500,000 in revenue. The brewery needs at least $15.000.000 in revenue, and has determined that the total demand will be at least 48 units of beer Complete parts (a) and (b) GITTE (a) How much of each type of beer should be made so as to minimize total production costs? units of light beer should be made, for a minimum total cost of $ units of regular beer and (Type integers or decimals) (b) Suppose the minimum revenue is increased to $15.700.000 Use shadow costs to calculate the total production cost The shadow cost of production is $ The increased minimum revenue corresponds to a total production cost of $ (Type integers of decimals

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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