Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE HELP AS SOON AS POSSIBLE THIS IS TIME SENSITVE I WILL GIVE A THUMBS UP THANK YOU SO SO MUCH A company that produces

PLEASE HELP AS SOON AS POSSIBLE THIS IS TIME SENSITVE

I WILL GIVE A THUMBS UP

THANK YOU SO SO MUCH

image text in transcribed
A company that produces healthcare services (patient visits) operates with the following production function where g denotes the weekly output level in terms of the number of patients, L represents the hours of human intelligence (doctors and nurses) employed per week, and K denotes the hours of artificial intelligence utilized per week: g = L[I'.H KD-EE} The cost per hour for artificial intelligence is represented by r, and the cost per hour for human intelligence is denoted by w, both expressed in dollars per hour. 1) Determine the optimal levels of L and K that minimize the firm's costs given a target level of production q. Express the cost-minimizing levels of L and K as two functions of q, w, and r. Show your work carefully. [20pts] For the following questions, for simplicity, assume that w=1 and r=1. 2) Suppose the firm aims to produce eight visits this week (gq=8), calculate the optimal hours of human intelligence L and artificial intelligence K. Also find the total cost of producing those eight patient visits. [5 pts] 3) Considering the firm has the flexibility to adjust L and K (we are in the long run of the firm), what is the firm's supply curve? [Spts] 4) Suppose the firm decides on a new production level of 12 patients seen per week but has already committed to 9 hours of artificial intelligence K and cannot change this input. How many hours of human intelligence L will the firm need to employ to achieve this new production level in the short run of the firm? What will be the cost of reaching this new output? [Spts] 5) Intuitively, with words, briefly discuss what would happen with your answers in (1), and (2) if there is technological change and now the production function becomes: g = L0-25 0.5 [5pts]

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

Economics

Authors: David Colander

7th Edition

0073402869, 9780073402864

More Books

Students also viewed these Economics questions

Question

Discuss the role of nostalgia in retro-marketing

Answered: 1 week ago