Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 4DQ
To determine
The cost incurred when the project is abandoned.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
ExxonMobil runs two oil refinery plants, one in Indonesia and the
other in Malaysia. The total cost function of the Indonesian plant is
TC₁ =Q and the total cost function of the Malaysian plant is
TC2=2Q2. If 5 units of refined oil are produced while
minimizing total cost, what is the optimal production at each plant?
O Indonesia 1, Malaysia=4
O Indonesia=0, Malaysia=5
O Indonesia 2, Malaysia=3
O Indonesia=3, Malaysia=2
Indonesia 4, Malaysia=1
You are analyzing a new company’s records projecting their profits using a marginal profit function, P′(x), where P is profit, in thousands of dollars, and x is the number of items they sell, in hundreds. the integral is from 5 to 1 for P ′(x) dx = 22. If the company projects to earn $26,000 of profit from selling 500 items and $7000 of that revenue from selling 100 items, what is their projected cost from selling 100 items?
Complete all of the following definitions
Knowledge Booster
Similar questions
- Q#3: XYZ construction are manufactures of slabs and are the major suppliers for orange train in Lahore. XYZ is manufacturing two types of slabs. The cost for these two types of slabs are $175 and $225, respectively. XYZ current production capacity is 200 slabs (both types). Because of the urgency of the need, government of the Punjab would pay the manufacture a bonus of $50,000 plus an additional $25 for each of the unit greater than 200. Determine the function which determine the sales of the number of slabs provided of each type by XYZ construction. What is the expected profit if XYZ is manufacturing 150 slabs of type 1, and 250 slabs of type ILarrow_forwardSuppose the cost function is given by TC = 5Q²+25√Q+5000. Find the VC, FC, ATC, AVC, AFC, MC for the following output levels 8 Q = 1; Q = 2; Q = 3; Q = 4; Q = 5; Q = 6; Q = 7; Q = 8; and Q = 9 Using the numerical answers above plot the TC, VC, FC, ATC, AVC, AFC, and MC in a single graph. You may want to use Excel to generate the graphs.arrow_forwardSuppose a Cobb-Douglas Production function is given by the function: P(L, K) = 22L0.6K0.4 Furthermore, the cost function for a facility is given by the function:C(L, K) = 400L + 500K Suppose the monthly production goal of this facility is to produce 10,000 items. In this problem, we will assume L represents units of labor invested and K represents units of capital invested, and that you can invest in tenths of units for each of these. What allocation of labor and capital will minimize total production Costs? Units of Labor L = (Show your answer is exactly 1 decimal place) Units of Capital K= (Show your answer is exactly 1 decimal place) Also, what is the minimal cost to produce 10,000 units? (Use your rounded values for L and K from above to answer this question.) The minimal cost to produce 10,000 units is $ Hint: 1. Your constraint equation involves the Cobb Douglas Production function, not the Cost function. 2. When finding a relationship between L and K in your system of equations,…arrow_forward
- Given that the Suez Canal might be blocked, the only alternate sea route to Europe (from China) is sailing around the Cape of Good Hope. This route is approximately 3.600 miles (nautical) longer than the Suez Canal route, and takes about 9 days at typical 16.5 knots (mph). List the factors (as many as you can think of) affecting the cost of transporting cargo by sea and guess their weight (importance) on the total cost. What change in the factors above would affect the optimal sailing speed?arrow_forwardA firm has three factories each producing the same item. Let x, y and z denote the respective output quantities that the three factories produce to fulfill an order of 2000 units in total. The cost functions for the three factories are the following: C₁(x) = 200 + C₂(y) = 200 + y + 1 100 1 X 2 - y² + y 300 C3 (2) 200+ 10z =arrow_forwardThis question illustrates the argument on p.114 of the book. A and B own neighboring properties. Beneath their properties is a common well that contains 200 units of oil. The cost to A of extracting oil from the well in period t depends on the number of units of oil in the well at the beginning of the period t, ut, and the number of units of oil A extracts in period t, xAt ; specifically, the average cost of extraction for A per unit in period t is xAt /ut. The analogous cost function for B is xBt/ut. The market price of a barrel of oil is 1, there are two periods (t = 1, 2), and the discount rate is zero. The oil is a common property resource. a) (2) Suppose that A and B "unitize" and cooperatively decide how much oil to extract, and split the profit between them. The jointly profit-maximizing policy is that each extracts 50 units of oil from her well in each of the first two periods, after which the well is dry. How much discounted profit will A and B each make? b) (2) Suppose…arrow_forward
- Q2. Assume that a Kia automobiles dealership in Mehrauli, Gurugram transshipped 300 Kia Sonet cars from South Korea at a cost of Rs. 13 lakhıs per car in September 2019. By March 31, 2020, they were able to sell 200 of these Sonet cars at a price of Rs. 16 lakhs each. The remaining Hyundai cars were sold in April 2020 at a price Rs. 14 lakhs each. How exactly will this affect the GDP in 2019-20 and 2020-21, and which components of GDP will be affected? Explain your answer through the expenditure as well as the value-added method of computing national income.arrow_forwardCoca cola uses labour(L) and capital (k) in its production process. It estimates that the production function facing it is given by Q= K0.5 L0.5. The company can sell a bottle of coke at GH4. The cost of a machine is GH3 and that of Man- hour is GH5. The firm's total cost if production at the end of production is expected to be GH 3000. Required: Determine The expression for the firm's marginal product of capital The expression for the firm's marginal product of labour The nature of the returns of the poduction The optimal level of capital and labour usage The firm’s firm’s profit at the optimal levels of capital and labour usage The firm’s elasticity of output with respect to labour and capital and interpret itarrow_forwardCoca cola uses labour(L) and capital (k) in its production process. It estimates that the production function facing it is given by Q= K0.5 L0.5. The company can sell a bottle of coke at GH4. The cost of a machine is GH3 and that of Man- hour is GH5. The firm's total cost if production at the end of production is expected to be GH 3000. Required: Determine The expression for the firm's marginal product of capital The expression for the firm's marginal product of labour The nature of the returns of the poductionarrow_forward
- The following formula is used in economics to find a company's net income N, where P is the sales price, V is the variable cost per unit, S is the sales volume, and F are fixed costs. N=S*(P-V)-F Rearrange the formula to highlight the sales volume. Sarrow_forwardThe table contains various costs of production that pertain to Mzanzi-Ndizvo (Pty).Complete the table below for the missing information using the necessary cost formulas.arrow_forwardCoca cola uses labour(L) and capital (k) in its production process. It estimates that the production function facing it is given by Q= K0.5 L0.5. The company can sell a bottle of coke at GH4. The cost of a machine is GH3 and that of Man- hour is GH5. The firm's total cost if production at the end of production is expected to be GH 3000. Required: Determine The optimal level of capital and labour usage The firm’s firm’s profit at the optimal levels of capital and labour usage The firm’s elasticity of output with respect to labour and capital and interpret itarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning