Question
Meals must be produced with 5 chefs and 2 ovens for each meal. Let Q be the number of meals, C be the number of
Meals must be produced with 5 chefs and 2 ovens for each meal. Let Q be the number of meals, C be the number of chefs, and O be the number of ovens. The price of one chef is PC and the price of one oven is PO. (a) What is the long-run total cost function for producing meals , T C (Q, PC , PO)? (Hint: think of this intuitively rather than using formulas. For example, what is the cheapest way to produce one meal? Two meals? Q meals?) (b) What is the production function for meals Q (C, O)? (This tells how many meals can be produced for each combination of C and O)
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