You manage a plant that mass produces engines by teams of workers using assembly machines The technology is summarized by the production functionq 5KL, whereqis the number of engines per week,Kis the number of assembly machines, andLis the number of labor teams Each assembly machine rents forr $10,000 per week, and each team costsw $5000 per week Engine costs are given by the cost of labor teams and machines, plus $2000 per engine for raw materials Your plant has a fixed installation of 5 assembly machines as part of its design What is the cost function for your plantnamely, how much would it cost to produceqengines What are average and marginal costs for producingqengines How do average costs vary with output How many teams are required to produce 250 engines What is the average cost per engine You are asked to make recommendations for the design of a new production facility What capital labor (K L) ratio should the new plant accommodate if it wants to minimize the total cost of producing at any level of outputq

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You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production functionq= 5KL, whereqis the

You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production functionq= 5KL, whereqis the number of engines per week,Kis the number of assembly machines, andLis the number of labor teams. Each assembly machine rents forr=$10,000 per week, and each team costsw=$5000 per week. Engine costs are given by the cost of labor teams and machines, plus $2000 per engine for raw materials. Your plant has a fixed installation of 5 assembly machines as part of its design.

What is the cost function for your plantnamely, how much would it cost to produceqengines? What are average and marginal costs for producingqengines? How do average costs vary with output?
How many teams are required to produce 250 engines? What is the average cost per engine?
You are asked to make recommendations for the design of a new production facility. What capital/labor (K/L) ratio should the new plant accommodate if it wants to minimize the total cost of producing at any level of outputq?