In the island nation of Autarka, cardboard boxes are manufactured by four rms: Andrew's Industries, Brett's Boxes, Carla's Cardboard, and Delia's Durables. In Autarka, cardboard boxes are sold in bundles of 100. At present, the market price for a bundle of boxes is $30. The technology for manufacturing cardboard boxes is readily available and common to all manufacturers. The cost of plant and machinery for a rm in the box manufacturing business is $7,000,000 per year. The labour, material, and energy cost of producing a bundle of 100 boxes is $20. A market study indicates that demand for cardboard boxes is given by the function, P= 40 - Q/500,000 ; where P represents the price of a bundle of 100 boxes, and Qis the total number of bundles of boxes sold each year. Using the information provided in the scenario, derive a total cost function for a typical cardboard box manufacturer. Use QA to denote the quantity produced by the typical firm.
In the island nation of Autarka, cardboard boxes are manufactured by four rms: Andrew's
Industries, Brett's Boxes, Carla's Cardboard, and Delia's Durables. In Autarka, cardboard boxes are sold in bundles of 100. At present, the market price for a bundle of boxes is $30. The technology for manufacturing cardboard boxes is readily available and common to all manufacturers. The cost of plant and machinery for a rm in the box manufacturing business is $7,000,000 per year. The labour, material, and energy cost of producing a
bundle of 100 boxes is $20. A market study indicates that demand for cardboard boxes is given by the function,
P= 40 - Q/500,000 ;
where P represents the price of a bundle of 100 boxes, and Qis the total number of bundles of boxes sold each year.
Using the information provided in the scenario, derive a total cost function for
a typical cardboard box manufacturer. Use QA to denote the quantity produced by the
typical firm.
Cost of production means the monetary value incurred to buy the factors of production. There are two types of cost one is fixed cost and other is variable cost
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