Instacart offers consumers a convenient form of home delivery service for groceries. Units of output (q) are individual grocery deliveries/day. Grocery deliveries are achieved through the use of delivery trucks (K) and workers (L). The price of labor (w) is $10/worker. Use the provided graph to answer the question below. K 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 B C $10 in cost savings $20 in cost savings $30 in cost savings O $40 in cost savings q=100 9-50 12 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 L How much in production costs does the firm save by choosing to produce 50 grocery deliveries with the input mix at point B, rather than with the input mix at point A?
Instacart offers consumers a convenient form of home delivery service for groceries. Units of output (q) are individual grocery deliveries/day. Grocery deliveries are achieved through the use of delivery trucks (K) and workers (L). The price of labor (w) is $10/worker. Use the provided graph to answer the question below. K 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 B C $10 in cost savings $20 in cost savings $30 in cost savings O $40 in cost savings q=100 9-50 12 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 L How much in production costs does the firm save by choosing to produce 50 grocery deliveries with the input mix at point B, rather than with the input mix at point A?
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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