managerial economics

B. An entrepreneur is starting its business. By hiring locals, he can make $900 over a three month. After that he will rent a machine at a rental fee of $2000. The projected surcharge is $ 250 for promotion and $ 4 per unit for materials. The product will be priced at $ 6.50 per unit. Determine: the accounting cost functions - the economic cost functions - How many units the products will be in the economic breakeven pointA. The new product will be lauched soon. Where there are Labor (L) and capital (K) produce output (Q), Q =0.02510.5 KOS MPL = 0.046(0.5)1 0.5K0.5 MPK = 0.026(0.5)10.5 K-0.5 - How many units of products can be produced with: 91 units of labor, $20,000 capital. And 253 units of labor and $40,000 of capital. What will happen to the returns to scale (increase, constant, or diminishing)? - Compute change in the marginal product of labor when labor: from 91 to 253 units, when it holds constant capital at 20,000 units. Then compute change in the marginal product of capital: from $20,000 to $40,000, when it hold constant labor at 91 units. Are returns to each factor increasing, constant, or diminishing? What will happen to each factor (increasing, constant, or decreasing