A firm faces the following costs: total cost of capital = $4,000; price paid for labor = $20 per labor unit; and price paid for raw materials = $8 per raw-material unit. Initially, the firm can produce 2,000 units of output by combining its fixed capital with 200 units of labor and 500 units of raw materials. After the firm improves its production process, it can produce 3,000 units of output by combining its fixed capital with 100 units of labor and 500 units of raw materials. How will the firm's total costs change as a result of the improved production process? Instructions: Enter your answers as a whole number. Total cost changes from $ using the original process to $ using the improved process.

Cost minimization when output is known and total costs are unknown. A factory that you are managing has an hourly production process that can be represented by the following Cobb Douglas Production function: Q = 2K0.50L 0.5 The price of one unit of capital per hour is $20 and the price of one unit of labour per hour is $20. You have been instructed to produce 200 units per hour or Q = 200. Find the optimal amount of labour and capital that you will be using, and compute the total cost.

Consider the following production function of DVDS: Q = K0.5L 0.5, where Q represents DVDS (boxes per hour), K denotes capital input (units per hour), and L denotes labour input (units of worker time per hour). The unit cost of capital and labour are $40 and $20, respectively. a) What is the optimal input ratio of labour and capital for the production? b) Determine the appropriate input mix to produce 800 boxes of DVDS. Compute the cost of production. c) Suppose the government decided to offer a subsidy that would make the cost of labour $15. What is the optimal input mix to produce the same level of output, and the new cost of production? Also, compute the substitution effect in the employment of labour.

Businesses wanted to reduce their cost to the minimum without compromising the product quality and violating laws. The total fixed cost decreases if the output increases. Thus the business is left with the variable cost to manage. Notably, the concept of the economies of scale also works for the government, non-profit organizations and individuals. The entity becomes more efficient as it produces more output and reduces cost as a result. The organization can benefit from the economics of scale, consequently, the consumers enjoy lower prices, and the economy expands to increase more demand. For huge businesses, economies of scale provide a competitive advantage over small enterprises. There are two types of economies of scale. The cost that the management can control is internal, while the cause for the cost to decrease attributed to geographic location, government policies, and industry changes are externals. Typically the internal economy of scale is found in large businesses as a…

A factory that you are managing has an hourly production process that can be represented by the following Cobb Douglas Production function: Q=10KL. The price of one unit of capital per hour is $20 and the price of one unit of labour per hour is $20. You have been instructed to produce 100 units per hour or Q-100. Find the optimal amount of labour and capital that you will be using, and compute the total cost.

If a firm has the production function q = f(L, K) = L + 2K, then its technology exhibits:   constant returns to scale   increasing returns to scale   None of the above.   decreasing returns to scale   increasing marginal product

Suppose your business is currently employing 750 workers, the only variable input, at a wage rate of RM48. The average product of labor is 96, the last worker added 6 units to total output, and total fixed cost is RM12,000. a) What is marginal cost? b) What is average variable cost? c) How much output is being produced? d) What is average total cost? e) Is average variable cost increasing, constant, or decreasing? What about average total cost?

Distinguish between short-run and long-run production decisions and illustrate their impact on costs and economies of scale

13) A firm's total cost function is TC = 0.5Q², where Q is the output level. What is the returns to scale of the firm's production function? A) Increasing returns to scale. B) Decreasing returns to scale. C) Constant returns to scale. D) Negative returns. E) None of the above.

The production function for a product is given by q = 100KL. If the price of capital is $120 per day and the price of labor $30 per day, what is the minimum cost of producing 1000 units of output?