Assume a firm produces both gasoline and diesel fuel from crude oil at their refinery. Given the same inputs they can produce either gasoline y_1 or diesel y_2, both of which share the joint production function x = y_1^2y _2^2 1. Find the firm's total cost curve c(y_1, y_2)assuming the per unit price of crude oil is w = 52. Find the marginal cost curve for y_1 3. Suppose the price of y_1, p_1 = 30 and the price of y_2, p_2 = 10 and the per unit price of crude oil is w = 5, what is the optimal amount of y_1for the firm to produce?

Assume a firm produces both gasoline and diesel fuel from crude oil at their refinery. Given the same inputs they can produce either gasoline y_1 or diesel y_2, both of which share the joint production function x = y_1^2y _2^2 1. Find the firm's total cost curve c(y_1, y_2)assuming the per unit price of crude oil is w = 52. Find the marginal cost curve for y_1 3. Suppose the price of y_1, p_1 = 30 and the price of y_2, p_2 = 10 and the per unit price of crude oil is w = 5, what is the optimal amount of y_1for the firm to produce?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Find the production which has the following cost function (q is output, v= cost of capital, w=labour cost): C = qv^1/3w^2/3
Consider the following short run cost function: TC = 4Q³ - 24Q² + 16Q + 100 Derive the expressions for marginal cost and average total cost. What can we infer about the range of output over which production shows increasing returns to labor and diminishing returns to labor?
Given the total cost equation: TC = 144 +2Q+Q² what is the average cost when the firm produces at the level of Q that yields the minimum average cost?
A firm produces plastic bins using labor (measured in man-hours) and capital (measured in machine-hours), according to the production function Q = f(L,K) = LK, where Q is the number of plastic bins produced. Suppose that the cost of labor is $20 per worker-hour and the cost of capital is $10 per machine-hour. What is the cost minimizing input combination if the firm wants to produce 28,800 plastic bins? Hint: The marginal products are MP, = K and MPg = L.
Note: Enter your answer withtout the dollar sign ($) For the cost function TC= 520 + 10Q + 5Q2, determine the average fixed cost of producing 5 units of output.
Let a firm's production function be f(K, L) = √2K1¹/21/2 a) Solve for the contingent demand functions for K and L. b) Substitute the contingent demand functions in the total cost that you minimized in part a) to obtain the total cost function.
Consider a production function Q = (K1/2) + (L1/2) + (M1/2) where L, K, M represent labor, capital, and material. Input prices for L, K, M are 1, 1, and 1. The firm wants to produce 12 units of output. a) What is the total cost if K = 4? b) What is the total cost if K = 4 and L = 9?
No hand written solution and no image
Consider the following multiple output cost function: C(Q1, Q₂) = 100+ 0.5Q₁Q2 + (Q₁)² + (Q₂)² Suppose Q₁ = Q₂ = 10 units. What is 100 in the above equation? a b FC C VC a Are there economies of scope when Q₁ Q₂ = 10 units? = AFC с Yes b No There are cost complementaries.