> ECON2300PracticeFinalExam.... Alltools Edit Convert Sign QOREN N 23 ECON2300Practicefina... X + Create U RC IS O PAGE 13 15. Applelusels labour and machines to produce iPhones according to the production function y = L1M%4 , where L is the number of units of labour used and M is the number of machines. The cost of labour is wy = 4 per unit and the cost of using a machine is wy; = 16. Apple faces a fixed cost of F' = 25 for renting its factory. Given these input prices, Apple chooses how much labour and machines to employ in order to minimize the cost of producing any given amount of iPhones y. Apple is therefore solving a cost-minimization problem. (a) (b) () (d) () 4] If Apple is cost-minimizing, how many workers will it use for each machine? That is, find the number of workers per machine that Apple will employ. (Hint: setup the tangency condition.) 2] Continuing to assume that Apple produces any given number of iPhones y in the cheapest way possible, use the equation defining the number of workers per machine rom part (a) and Apple's production function to find expressions for the cost-minimizing choices of labour and machines as functions of output produced y. 4] Now use your answers to part (b) to derive Apple's total cost for producing iPhones as a function of the number of| units produced . 6] Regardless of the answers you have obtained above, for the remainder of the question, assume that Apple's total cost for producing iPhones is given by C(y) = 16y2+25. Derive and plot on a diagram the following cost functions for Apple: average cost, average variable cost, and marginal cost. Be sure to solve for and clearly label the level of y where average cost attains on minimum on your graph. [4] Suppose Apple is operating in a perfectly competitive market where it takes the price AP SEORD] [~ Q o &) JORNC)