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: Cengage Learning
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Chapter 9, Problem 1.3CE
To determine
To ascertain the different types of cost output relationship as suggested by statistical results.
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Check out a sample textbook solutionStudents have asked these similar questions
A firm has the following production function:
Q = 9L2/3K1/3
Where Q is output, L is labor and K is Capital.
Where Q is output, L is labor and K is Capital.
(a) What sort of returns to scale characterize this production function?
(b) Derive the marginal product of labor and capital.
(c) What do we mean when we say the production function is linearly homogenous?
Use the equations for the total cost C and total revenue R to find the number x of units a company must sell to break even. (Round to the nearest whole unit.)
C = 8950x + 220,000, R = 9857x
The difference between ATC and AVC decreases with decrease in level of output.
Chapter 9 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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- material cost depends on per unit of outputarrow_forwardEmco Company has an assembly line of fixed size A. Total output is a function of the number of workers (crew size) as shown in the following schedule: Crew Size Total Output (No. of Workers) (No. of Units) 0 0 1 10 2 35 3 50 4 56 5 59 6 60 7 60 8 58 Determine the following schedules: (a) Marginal productivity of labor (b) Average productivity of labor (c) (d) Elasticity of production with respect to labor Draw and Show relationship MPL & APLarrow_forwardDefine the term Cost Reduction?arrow_forward
- Someday, if you want to be an economist or to study more about economic analysis, what platform you will implement to sustain the development of cost estimating fundamentals?arrow_forwardWhich of the following statements related to cost estimation methods is false? a. The three methods determine a slope and an intercept. b. The most complex method of cost estimation is the high-low method. C. None of the given answers. d. The least-squares regression method is the most accurate and reliable method to de compared to scatter-graph plot and high-low methods. The low-high method is LUsed to derive an estimated line of cost hehavior hy granhical pe here to search hp 10 & 7 V # 3 4 5 6 8 R Y 19 2.arrow_forwardThe improvement in output per worker due to adopting new technology could be shown as (Select one from the picture attached)arrow_forward
- A recent engineering was given the job of determining the best production rate for a new type of casting in a foundry. After experimenting with many combinations of hourly production rates and total production cost per hour, he summarized his findings in table below (column 2). The engineering then talked to the firm’s marketing specialist, who provided estimates of selling price per casting as a function of production output (see table 1 column 3). There are 8,760 hours in a year. What production rate would you recommend to maximize total profits per year? a) 100 ; b) 200 ; c) 300 ; d) 400 ; e) 500 show the computation how to solve it.arrow_forwardA recent engineering was given the job of determining the best production rate for a new type of casting in a foundry. After experimenting with many combinations of hourly production rates and total production cost per hour, he summarized his findings in table below (column 2). The engineering then talked to the firm’s marketing specialist, who provided estimates of selling price per casting as a function of production output (see table 1 column 3). There are 8,760 hours in a year. What production rate would you recommend to maximize total profits per year? a) 100 ; b) 200 ; c) 300 ; d) 400 ; e) 500 Show handwritten solutions.arrow_forward1. Exercise 9.1 A study of 86 savings and loan associations in six northwestern states yielded the following cost function. 2.38 0.006153Q 0.000005359Q² 19.2X1 C + + (2.62) (2.84) (3.16) (3.50) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X1 = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Which of the variable(s) is (are) statistically significant in explaining variations in the average operating expense ratio? (Hint: t0.025,7€ 1.99 .) Check all that apply. X1 Q2 What type of average cost-output relationship is suggested by these statistical results? Quadratic Linear Cubic Based on these results, what can we conclude about the existence of economies or diseconomies of scale in savings and loan associations in…arrow_forward
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