A company produces two different versions of a certain product. Let q₁ indicate the amount produced of the first version. The cost function c(q₁) for the first version (expressed in euros) can be described by the equation c(9₁) 9₁. √0.59² +59₁ 10 a) For which value(s) of q₁ is the instantaneous rate of change of the cost function equal to 1.75? You may use the graphical calculator to find zeros of a polynomial function if needed. b) Using the result from a), give a precise economic meaning for the instantaneous rate of change of 1.75. = We now denote q2 as the amount produced of the second version. The equation of the cost function c(9₂) for the second version is unknown. We do know that the current cost for a production of 2 units of the second version is 50 monetary units and that the elasticity of the cost in terms of the produced amount when 9₂ = 2 is equal to 1.88.
A company produces two different versions of a certain product. Let q₁ indicate the amount produced of the first version. The cost function c(q₁) for the first version (expressed in euros) can be described by the equation c(9₁) 9₁. √0.59² +59₁ 10 a) For which value(s) of q₁ is the instantaneous rate of change of the cost function equal to 1.75? You may use the graphical calculator to find zeros of a polynomial function if needed. b) Using the result from a), give a precise economic meaning for the instantaneous rate of change of 1.75. = We now denote q2 as the amount produced of the second version. The equation of the cost function c(9₂) for the second version is unknown. We do know that the current cost for a production of 2 units of the second version is 50 monetary units and that the elasticity of the cost in terms of the produced amount when 9₂ = 2 is equal to 1.88.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 3MC
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