Production and Costs Analysis• The cost of land is L.E20 per square meter.• The interest rate on capital is 10%.Fill in the missing parts in the following tables to illustrate thebehavior of production and costs in the short-run; thendetermine the optimal level of production according to thenumber of inputs you are intending to use.• The average wages per unit of labor is L.E1500.GodspeedAshraf HelmyThe production function of the firmEnd of document IOutputUnitsLandСapitalEgyptian PoundsLaborSquare MetersUnits10001600210025002600OutputFCVCTCMCLMPLAVCAFCATC10001600210025002600Hint:• Consider land and capital as fixed factors, while laborunits as variable factors.

Capital is a fixed factor. A fixed amount is assumed to be invested, the interest on which is…

Production and Costs Analysis Fill in the missing parts in the following tables to illustrate the behavior of production and costs in the short-run; then determine the optimal level of production according to the number of inputs you are intending to use. The production function of the firm Output Units 0 Land Square Meters Output 0 1000 -- 1600 2100 2500 2600 FC 1000 1600 2100 2500 2600 VC TC Capital Egyptian Pounds MCL MP AVC Labor Units AFC ATC • The cost of land is L.E20 per square meter. • The interest rate on capital is 10%. • The average wages per unit of labor is L.E1500. Godspeed Ashraf Helmy End of document

Production and Costs Analysis Fill in the missing parts in the following tables to illustrate the behavior of production and costs in the short-run; then determine the optimal level of production according to the number of inputs you are intending to use. The production function of the firm Output Units 0 Land Square Meters Output 0 1000 -- 1600 2100 2500 2600 FC 1000 1600 2100 2500 2600 VC TC Capital Egyptian Pounds MCL MP AVC Labor Units AFC ATC • The cost of land is L.E20 per square meter. • The interest rate on capital is 10%. • The average wages per unit of labor is L.E1500. Godspeed Ashraf Helmy End of document

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

Production and Costs Analysis
• The cost of land is L.E20 per square meter.
• The interest rate on capital is 10%.
Fill in the missing parts in the following tables to illustrate the
behavior of production and costs in the short-run; then
determine the optimal level of production according to the
number of inputs you are intending to use.
• The average wages per unit of labor is L.E1500.
Godspeed
Ashraf Helmy
The production function of the firm
End of document I
Output
Units
Land
Сapital
Egyptian Pounds
Labor
Square Meters
Units
1000
1600
2100
2500
2600
Output
FC
VC
TC
MCL
MPL
AVC
AFC
ATC
1000
1600
2100
2500
2600
Hint:
• Consider land and capital as fixed factors, while labor
units as variable factors.

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