Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Warren & Smith Company manufactures commercial zippers of two kinds, kind X and kind Y. Its production department estimates that the average cost function

The Warren & Smith Company manufactures commercial zippers of two kinds, kind X and kind Y. Its production department estimates that the average cost function of the firm is AC=X^2+2Y^2-2XY-2X-6Y+20

a) The manager of the firm would like to know the level of output of zipper X and zipper Y at which the average cost of the firm is minimized, and the level of this minimum average cost.

b)The firm expects an order that will require it to produce a total output of 6 units of both kinds of zippers (each unit may be a large number of zippers), and so the manager would also like to know how many of each type of zipper the firm must produce to minimize its average cost, and what its minimum average cost would be if it receives the order. The manager gives this assignment to two researchers who use different methods to obtain their answers.

c)While the firm expects the order to be of 6 units, it may be as large as 7 units or as small as 5 units. Determine the minimum average cost for the firm with these different order sizes.

Step by Step Solution

3.44 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

Answer information The given function Ac 2 2x2y20 dy 2... 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

Microeconomics An Intuitive Approach with Calculus

Authors: Thomas Nechyba

1st edition

538453257, 978-0538453257

More Books

Students also viewed these Mathematics questions