Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I have done it and wanna check if I had done it wrong. Please give me the result to compare d. If marginal cost were

I have done it and wanna check if I had done it wrong. Please give me the result to compare

image text in transcribed
d. If marginal cost were to increase by 30 at each level of output at what point would prots be maximized? (1 mark) e. Given the original level of marginal cost, at what level of output would the rm maximize prots if marginal revenue were to increase by 34 at each level of output? (1 mark) (Total 7 marks) SECTION D: [38 Marks] Chapter 7: Costs and Supply 11. A rm making toffees has a choice between three production techniques, each using different combinations of labour input and capital input, as shown in the table below. Suppose labour costs 200 per unit / week and capital input costs 400 per unit/ week. Technique A Technique B Technique C L K 4 6 2 8 10 3 4 12 14 4 5 16 19 5 6 20 25 6 7 24 32 7 I 120 8 45 38 29 40 a. For each level of output; state which production technique should be adopted by the rm. 1). Calculate total cost for each level of output. c. Suppose the price of labour input increases to 300 per unit! week, but the price of capital remains constant. In what way would you expect the rm's choice of technique to be affected by this change in relative prices? (I. With the new labour cost, state which production technique should be adopted for each output level and calculate total cost. (Each point carries 2 marks. Total 8 marks) 12. A rm faces long-run total cost conditions as given in the table below: Output (units/ week Total cost (6) Long-run Long-run avera_e cost mar_inal cost 0 0 1 32 2 48 3 82 4 140 5 228 6 352

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

Environmental Economics

Authors: Stephen Smith

6th Edition

0199583587, 9780199583584

More Books

Students also viewed these Economics questions