Is this correct? > Suppose that, in the short run, Jabot's input L is variable and input K is fixed at> Also find the marginal and average products when Jabot chooses L* to minimize6.Jabot Company II: SR Cobb-Douglas ProductionKo. Find expressions for average cost, variable cost, and marginal cost.ouboot beithe total cost of Qo, given fixed Ko. MP,* and AP* are functions of w, r, and Qo.> The Jabot company's production function is:Q(L, K) = L½K½a. Rewrite the equation of the long run total cost from Problem (4d). Derive theequations of long run average and marginal cost:LTC= WL* +r k*LAC:リaarwしtCLTC =LAC =CAC- LTC ar'awリス@Qdue ar Va w/la QLMC = drLML=こb. Suppose K is fixed at Ko. Solve the production function for L to find the short runcost equations as functions of Q with parameters w, r, and Ko:Stcz wL trk,wiCQ%/Ko) r.koSTC =w Q/katr Ko /QwQ +r Koto KoSAC =wQKoKoAVC =AVC:SMC =Ko

Answered: Image /qna-images/answer/55330ca0-81e3-41af-b031-9ebbad3aec1f.jpg

and average products when Jabot chooses L* to minimize Cost of Qo, given fixed Ko. MP* and AP* are functions of w, r, and Qo. The Jabot company's production function is: Q(L, K) = L²K² %D a. Rewrite the equation of the long run total cost from Problem (4d). Derive the equations of long run average and marginal cost: LTC: wL* +vヒ* LAC: LTC リa LTC = _dra CAC: LTC Qr'aw LAC = 2r"a w ar! da 2,V2 w'lail こ b. Suppose K is fixed at Ko. Solve the production function for L to find the short run cost equations as functions of Q with parameters w, r, and Ko: LMc= ditz 2r LML= LMC = Stcz wL trk, wi CQ/ko) v.ko STC = (+rk. wQ/kotr Ko /Q %3D 1メ+ wQ Ko SAC = to Ko KFr.ko AVC = Ko Smc= d u SMC =

and average products when Jabot chooses L* to minimize Cost of Qo, given fixed Ko. MP* and AP* are functions of w, r, and Qo. The Jabot company's production function is: Q(L, K) = L²K² %D a. Rewrite the equation of the long run total cost from Problem (4d). Derive the equations of long run average and marginal cost: LTC: wL* +vヒ* LAC: LTC リa LTC = _dra CAC: LTC Qr'aw LAC = 2r"a w ar! da 2,V2 w'lail こ b. Suppose K is fixed at Ko. Solve the production function for L to find the short run cost equations as functions of Q with parameters w, r, and Ko: LMc= ditz 2r LML= LMC = Stcz wL trk, wi CQ/ko) v.ko STC = (+rk. wQ/kotr Ko /Q %3D 1メ+ wQ Ko SAC = to Ko KFr.ko AVC = Ko Smc= d u SMC =

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.9P

See similar textbooks

Similar questions

For a firm with a Total Cost function TC C(Q), recall that the definitions of Marginal Cost (MC) and AverageTotal Cost (ATC) are given as follows:Marginal Cost (MC) = C'(0)Average Total Cost (ATC) = C(Q)/QProve that the marginal cost is equal to the average total cost (MC = ATC) when the average total cost is at itsminimum value.(Hint: By using the definition of average cost function, find the quantity that minimizes it by applying unconstraint optimization.Show that the FOC of the minimization problem implies that MC=ATC has to be satisfied at the minimum level of average cost.)
Y6 questions1. A firm produces TVs and ovens witha joint cost function that takes the form:C(x,y) = 3x^2 + 2y^2 + 2xy where x and y are the firm's output of TVs and ovensrespectively. Suppose the cost function is subject to the constraint on the total output ofthe firm in the form 2x + y = 35.a) Find the optimum values x and that minimize the firm's total cost.b) Check your answer in (a) by using the bordered Hessian matrix.c)Determine the optimum value of the Lagrange multiblier À. Interpret your answer.
Nimubs, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus's output during a given day: Workers Output Marginal Product Total Cost Average Total Cost Marginal Cost 0 20 50 90 0 1 2 3 A worker is paid $100 a day, and the company's fixed cost is $200. What is the marginal cost as Nimbus's output increases from 50 brooms to 90 brooms? $3.33 $2.5 $5.56 $100
When output is zero, total fixed cost is zero. O True O False
The table below shows the long run total cost function for a firm. The firm's cost function exhibits: Quantity of Output 0 2 3 4 5 Odiseconomies of scale Total Cost ($) O constant returns to scale O economies of scale O decreasing marginal cost O increasing marginal cost 10 20 30 40 50 K
Solve for the following:a. Marginal Costb. Average CostSuppose that a food manufacturing company’s cost function is given by thefollowing equation: (in the picture)
Figure 7.3 shows the short-run cost curves for a producer. In the figure below, lines H. J. and K represent: Figure 7.3 Select one: O a marginal product, average product, and total product, respectively. average fixed cost, average total cost, and average variable cost, respectively. marginal cost, average total cost, and average variable cost, respectively. average total cost, marginal cost, and average variable cost, respectively. marginal cost, average product, average total cost, respectively
Suppose that the Acme Gumball Company has a fixed proportions production function that requires it to use two gumball presses and one worker to produce 1,000 gumballs per hour. a. Explain why the cost per hour of producing 1,000 gumballs is 2v + w (where v is the hourly rent for gumball presses and w is the hourly wage). b. Assume Acme can produce any number of gumballs they want using this technology. Explain why the cost function in this case would be TC = q(2v +w), where q is output of gumballs per hour, measured in thousands of gumballs. c. What is the average and marginal cost of gumball production (again, measure output in thousands of gumballs)? Graph the average and marginal cost curves for gumballs assuming v=3, w-5 Now graph these curves for v=6, w=5. Explain why these curves have shifted.
Give two examples of explicit cost for a firm
Suppose that the Acme Gumball Company has a fixed proportions production function that requires it to use two gumball presses and one worker to produce 1,000 gumballs per hour. a. Explain why the cost per hour of producing 1,000 gumballs is 2v + w (where v is the hourly rent for gumball presses and w is the hourly wage). b. Assume Acme can produce any number of gumballs they want using this technology. Explain why the cost function in this case would be TC = q(2v +w), where q is output of gumballs per hour, measured in thousands of gumballs. c. What is the average and marginal cost of gumball production (again, measure output in thousands of gumballs)? (show the complete formula) Draw the graph for the average and marginal cost curves for gumballs assuming v=3, w-5 (show working) Now draw the graph for these curves for v=6, w=5.( show working) Explain why these curves have shifted.
The Trouser Company has fixed costs of 2,000 per week. In addition, we have some information about its marginal costs (MC) and total variable costs (TVC) Output 0 30 60 90 100 120 150 MC 140 59 32 59 80 140 275 TVC 0 2850 4080 5310 6000 8160 14,250 For each of the output levels in the table, calculate the Trouser Company’ average variable costs (AVC) and average (total) cost (AC)
Yennefer produces spells. Suppose q is the quantity of spells produced. Her Total Costs are given byTC(g)=101+q^2 and her Marginal Costs are given by MC(g)=2q. What is the quantity of spells thatminimizes her Average Total Cost?