Suppose in the short run a firm’s production function is given by Q = L 1 2 K 1 2 and that K is fixed at K = 10. If the price of
1 answer:
The firm’s marginal cost of production when the firm is producing 50 units of output is 33.33
Solution:
The production function is Q =
The initial value is 10 units. The production value is 50 units The manufacturing cycle needs work as stated below.
Q =
Q =
L =
The wage rate is $15 . The following is the expense of the manufacturing process.
TC =
TC =
The marginal production cost is really the increase in manufacturing costs as output increases by 1 point.
As listed below, the marginal cost:
TC =
MC = =
MC = = 33.33
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Answer:
.d. The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.
Explanation:
The use of the machine would increase the supply of lattes and price falls. The supply curve would shift to the right. If scientists discover that coffees reduce heart attack, the demand for coffee would increase and price would increase. The demand curve would shift to the right.
The combined effect would be a rise in equilibrium quantity and an indeterminate effect on equilibrium price.
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