Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ans in full steps Q1. An oil transmission company uses only two inputs, pipelines and workers. Its output is the volume of oil transmitted (V),

Ans in full steps

image text in transcribed
Q1. An oil transmission company uses only two inputs, pipelines and workers. Its output is the volume of oil transmitted (V), which is determined by the area of the cross section (3.14r2) and the length of pipeline (h). Thus, V - 3.14r?h, where r is radius of the pipeline and h is the total length of the pipeline. The cost of building the pipeline depends on the surface area of the pipeline S, where S - 6.28rh, which cost $100 per S. Besides, cost of hiring labor for managing the pipeline depends on the length of the pipeline, which costs $10 per h. A standard pipeline radius r is 0.5 meter. (a). If both r and h double, output (V) will increase by how much? (b). If both r and h double, total cost (C) will increase by how much? (c). Based on (a) and (b), are these economies of scale

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Climate Policy And Nonrenewable Resources The Green Paradox And Beyond

Authors: Karen Vollebergh, Rick Van Der Ploeg

1st Edition

0262319845, 9780262319843

More Books

Students also viewed these Economics questions

Question

How can positive self-talk help you change a bad habit?

Answered: 1 week ago

Question

Peoples understanding of what is being said

Answered: 1 week ago

Question

The quality of the proposed ideas

Answered: 1 week ago