Suppose that a rock star gives concerts. The production function of the concert is the following: Q(C,A,G) = (C – 10)/ªA¼4G?/4 where C represents hourly contribution of guitarist Chris; A represents hourly contribution of guitarist Ataman and G represents hourly contribution of guitarist George. a) If Chris has 26 units of hours, is there increasing returns to scale in production of concerts? b) Assume George has fixed amount of hours, G=16, and hourly wage of G is 5. Denote the wage of Chris= r and the hourly wage of Ataman =w. Derive Rock star's demand for inputs-C and A, respectively-as a function of output (Q). c) Assume that George has fixed amount of hours G=16 and hourly wage of G is 5. Additionally, you are given that the wage of C=r=100 and the unit wage of Ataman=w=100. Show that Rock star's short run cost function is given by TC(Q) = 1000 +50Q²-

Suppose that a rock star gives concerts. The production function of the concert is the following: Q(C,A,G) = (C – 10)/ªA¼4G?/4 where C represents hourly contribution of guitarist Chris; A represents hourly contribution of guitarist Ataman and G represents hourly contribution of guitarist George. a) If Chris has 26 units of hours, is there increasing returns to scale in production of concerts? b) Assume George has fixed amount of hours, G=16, and hourly wage of G is 5. Denote the wage of Chris= r and the hourly wage of Ataman =w. Derive Rock star's demand for inputs-C and A, respectively-as a function of output (Q). c) Assume that George has fixed amount of hours G=16 and hourly wage of G is 5. Additionally, you are given that the wage of C=r=100 and the unit wage of Ataman=w=100. Show that Rock star's short run cost function is given by TC(Q) = 1000 +50Q²-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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