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You are given another firms Total Cost functions of various plant complexes:1 Plant:1000 + 660Q - 75Q2 +3Q32 Plants:1200 + 1150Q -66.5Q2 + 1.1Q33 Plants:1400
You are given another firms Total Cost functions of various plant complexes:1 Plant:1000 + 660Q - 75Q2 +3Q32 Plants:1200 + 1150Q -66.5Q2 + 1.1Q33 Plants:1400 + 1446Q - 61Q2 + 0.75Q3a)With an expected production quantity of around 30, what would be the most efficient Long-Run scale (#plants)? Why? (Probably easiest to run Q from 0-50 by 2s, and plug in the cost functions).b)If quantity demanded shifts to around 40, what would be the best strategy, add a plant, close a plant or continue to operate at the scale determined in a? Why?
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