Production and Costs Analysis Fill in the missing parts in the following tables to illustrate the behavior of production and costs in the short-run; then determine the optimal level of production according to the number of inputs you are intending to use. The production function of the firm Output Units 0 Land Square Meters Output 0 1000 -- 1600 2100 2500 2600 FC 1000 1600 2100 2500 2600 VC TC Capital Egyptian Pounds MCL MP AVC Labor Units AFC ATC • The cost of land is L.E20 per square meter. • The interest rate on capital is 10%. • The average wages per unit of labor is L.E1500. Godspeed Ashraf Helmy End of document
Production and Costs Analysis Fill in the missing parts in the following tables to illustrate the behavior of production and costs in the short-run; then determine the optimal level of production according to the number of inputs you are intending to use. The production function of the firm Output Units 0 Land Square Meters Output 0 1000 -- 1600 2100 2500 2600 FC 1000 1600 2100 2500 2600 VC TC Capital Egyptian Pounds MCL MP AVC Labor Units AFC ATC • The cost of land is L.E20 per square meter. • The interest rate on capital is 10%. • The average wages per unit of labor is L.E1500. Godspeed Ashraf Helmy End of document
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 9E
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Question
Transcribed Image Text:Production and Costs Analysis
• The cost of land is L.E20 per square meter.
• The interest rate on capital is 10%.
Fill in the missing parts in the following tables to illustrate the
behavior of production and costs in the short-run; then
determine the optimal level of production according to the
number of inputs you are intending to use.
• The average wages per unit of labor is L.E1500.
Godspeed
Ashraf Helmy
The production function of the firm
End of document I
Output
Units
Land
Сapital
Egyptian Pounds
Labor
Square Meters
Units
1000
1600
2100
2500
2600
Output
FC
VC
TC
MCL
MPL
AVC
AFC
ATC
1000
1600
2100
2500
2600
Hint:
• Consider land and capital as fixed factors, while labor
units as variable factors.
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