EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 7, Problem 7.7P
a)
To determine
The means by which output should be allocated among the two firms provided that the owner wants to minimize short run total cost.
b)
To determine
The total and average cost
c)
To determine
The means by which production should be allocated among the two firms in the long term.
d)
To determine
The means by which the above answer would change, provided that both the firms faced decreasing returns to scale.
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Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is
described by the Cobb-Douglas production function
Q = F(L, K)
Q = 10L0.25 K0.25
where Lis their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 per
week. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital.
a. What is their short-run cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
b. What is their short-run average cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
c. What is their long-run cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
d. What is their long-run average cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
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Chapter 7 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 7.1 - Prob. 1MQCh. 7.1 - Prob. 2MQCh. 7.1 - Prob. 1TTACh. 7.1 - Prob. 2TTACh. 7.2 - Prob. 1MQCh. 7.2 - Prob. 2MQCh. 7.2 - Prob. 1TTACh. 7.2 - Prob. 2TTACh. 7.3 - Prob. 1MQCh. 7.3 - Prob. 2MQ
Ch. 7.3 - Prob. 3MQCh. 7.3 - Prob. 1TTACh. 7.3 - Prob. 2TTACh. 7.5 - Prob. 1TTACh. 7.5 - Prob. 2TTACh. 7.6 - Prob. 1MQCh. 7.6 - Prob. 2MQCh. 7.6 - Prob. 3MQCh. 7.6 - Prob. 1.1MQCh. 7.6 - Prob. 2.1MQCh. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Prob. 8RQCh. 7 - Prob. 9RQCh. 7 - Prob. 10RQCh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.4PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.6PCh. 7 - Prob. 7.7PCh. 7 - Prob. 7.8PCh. 7 - Prob. 7.9PCh. 7 - Prob. 7.10P
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