Question

You manage a plant that​ mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function qequals5KL where q is the number of engines per​ week, K is the number of assembly​ machines, and L is the number of labor teams. Each assembly machine rents for requals​$10 comma 000 per​ week, and each team costs wequals​$5 comma 000 per week. Engine costs are given by the cost of labor teams and​ machines, plus ​$3 comma 000 per engine for raw materials. Your plant has a fixed installation of 5 assembly machines as part of its design. The total cost of producing q units of output​ (TC) is:

Answer 1

Answer:

$2200

Explanation:

will be Lq25.The total cost function is thus given by the sum of the costs of capital, labor, and rawmaterials:TC(q) = rK +wL +2000q = (10,000)(5) + (5,000)(q25) + 2,000 qTC(q) = 50,000 +2200q.The average cost function is then given by:AC(q) TC ( q ) q  50,000  2200 q q . and the marginal cost function is given by: MC ( q )   TC  q  2200.