Answered: If a firm produces an output x at a…

If a firm produces an output x at a total cost of C-ar' +hr, (a, b> 0) find an expression for ne the elasticity of total cost. Show that ne is always greater than unity and increases as x increases.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 4SQP

See similar textbooks

Related questions

Q: sumer Equilibainun 40. Price Loome g the con suner is oMR a th. the consuner is oMR 40. Price CDs is…

A: Consumer Equilibrium It refers to the number of goods and services that end users can purchase with…

Q: What about 2& 3?

A: In an economy, an individual will make his consumption decision based on his preferences and that…

Q: A machine that produces a certain piece must be turned off by the operator after each piece is…

A: Given:- Machine produces=50,000 pieces Operator earns=$4 Break require servicing=After 476 hours…

Q: Write a profit function and graph it to advise the grower on the most profitable amount of…

A: Profit refers to the difference between the total revenue and total costs which a producer earns for…

Q: Suppose the marginal product of labor for a firm is given by the figure found here:…

Q: Golden Age Retirement Planners specializes in providing financial advice for people planning for a…

A: The break-even point is the point at which TC and TR are equal, meaning there is no loss or gain for…

Q: World annual usage of mineral M is actually declining by 5% a year. The current rate of extraction…

A: The ratio's reserve fraction (numerator) is the quantity of a resource that is known to exist in a…

Q: Is due a full commission from the seller

A: Jenny put in a full offer on a property, which was accepted, and decided after 3 days to cancel the…

Q: The US, Mexico, and Canada all produce steel and corn. The table below shows the total production…

A: Absolute advantage is the ability of an individual, company, region, or country to produce more of a…

Q: after 2 years

Q: What is the 4p ( Product, price, place, promotion) of caribou coffee ?

A: PRODUCT One of the all-time greats. Perfectly proportioned. Sweet with a hint of heat. When you keep…

Q: hi you have not specified how you got 1.152

A: Given information: The UK inflation rate is predicted to be 10% The Eurozone inflation rate is…

Question

If a firm produces an output x at a total cost of C=a² + bx, (a, b> 0) find
in expression for ne , the elasticity of total cost. Show that ne is always greater than unity
and increases as x increases.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A firm has a linear demand function for its product. When the price of the product isSh.220, the quantity demanded is 40 units. When the price increases to Sh.240, thequantity demanded becomes 30 units. In addition, the firm’s marginal cost function isgiven by:MC = 40q – 2q2 + 2Fixed cost = Sh.5 millionWhere q = quantity demanded, MC = marginal cost (Sh. million)Evaluate the level of output that maximizes profits.
8. Consider the following cost function: C(Q) = 20Q3 – 15Q? + 10Q. Answer the following questions: What is the range of output where this firm has economies (a) of scale. (b) cost function. You must compute the expression using the cost function given in this question. What is the measure of cost-output elasticity (Ec) for this
1. A firm’s production function is , where Ldenotes the size of the workforce. Find the value of MPLin the case when: (a) L=1, (b) L=10, (c) L=100, (d) L=1000 Does the law of diminishing marginal productivity apply to this particular function? 2. Show that the price elasticity of demand is constant for demand functions of the form where A and n are positive constants. 3. The demand and total cost functions of a good arerespectively and a) Find expressions for TR, (profit) , MR, and MC in terms of Q. b) Solve the equation and hence determine the value of Q which maximizes profit. c) Verify that, at the point of maximum profit, MR=MC. 4. The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: (a) GH¢10 million for the land (b) GH¢1/4 million per floor (c) Specialized costs of GH¢10000x per floor. How many floors should the office complex contain if the average cost per floor is to be minimized? 5. The supply…
Suppose that a firm has increasing marginal cost, and a positive fixed cost. What happens to minimum effcient scale if the xed cost increases
I need help please
. An electricity producer has a constant marginal cost of production equal to $40 per megawatt. The residual demand for its electricity is given by P (q) = a−bq, where P is the price and q is the quantity of power generated by this producer. The producer knows the slope, b, but he vertical intercept of the residual demand curve, a is unknown. Assume A and B are greater than zero. If you get stuck, you may answer any of the following questions for special case where a = 80 And b = 0.5 for partial credit. (a) What is the marginal revenue, M R(q), for this producer? b) What is the optimal q for this producer? (c) What is the electricity producer’s optimal price? (d) What is the electricity producer’s optimal bid in a uniform price Auction? e) Suppose b is equal to zero. Would the producer have an incentive to submit a bid above its marginal cost? Explain.
Homework 2.1 Suppose a business manager of the factory wants to assess in terms of elasticity of demand, whetherthe products that his business is producing are complement goods or substitute goods inconsumption. So please explain which are the factors need to consider the long-run average cost curve in terms of usage of input?
production function: ƒ (k, 1) = 9 function. k Derive the firm's cost
he total revenue curve of a firm is R(q)=40q−12q and its average cost A(q)=130q−12.85q+20 +400q,where q is the firms output. i. Derive an expression C(q) for the firms total cost function. ii. Derive an expression Π(q) for the firms profit function. iii. Is the rate of change of profit increasing or decreasing when the ouput level of the firm is 10 units? iv. Determine the level of output for which the firms profit is maximized. v. What is the firmss maximum profit?
For a firm with a Total Cost function TC C(Q), recall that the definitions of Marginal Cost (MC) and AverageTotal Cost (ATC) are given as follows:Marginal Cost (MC) = C'(0)Average Total Cost (ATC) = C(Q)/QProve that the marginal cost is equal to the average total cost (MC = ATC) when the average total cost is at itsminimum value.(Hint: By using the definition of average cost function, find the quantity that minimizes it by applying unconstraint optimization.Show that the FOC of the minimization problem implies that MC=ATC has to be satisfied at the minimum level of average cost.)
A5
Prove it! 2. If the demand function for products A and B is in the order Pa = 36 - 3Qa and Pb = 40 - 5Qb and the common cost function is TC = Qa' + 2QaQb + 3Qb². With the above information, then calculate: a. Production values A and B at the maximum or minimum profit levels. b. The maximum or minimum profit value Did the profit reach its maximum or minimum value? Prove it c.