Maurice Tutor

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Teaching Since: May 2017
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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 29 Sep 2017 My Price 4.00

company’s cost function,

*12. A computer company’s cost function, which relates its average cost of production AC to its cumulative out- put in thousands of computers Q and its plant size in terms of thousands of computers produced per year q (within the production range of 10,000 to 50,000 com- puters), is given by

 

AC = 10 - 0.1Q + 0.3q

 

a.    Is there a learning-curve effect?

b.     Are there economies or diseconomies of scale?

c.     During its existence, the firm has produced a total of 40,000 computers and is producing 10,000 com- puters this year. Next year it plans to increase pro- duction to 12,000 computers. Will its average cost of production increase or decrease? Explain.

*12. A computer company’s cost function, which relates its average cost of production AC to its cumulative out- put in thousands of computers Q and its plant size in terms of thousands of computers produced per year q (within the production range of 10,000 to 50,000 com- puters), is given by

 

AC = 10 - 0.1Q + 0.3q

 

a.    Is there a learning-curve effect?

b.     Are there economies or diseconomies of scale?

c.     During its existence, the firm has produced a total of 40,000 computers and is producing 10,000 com- puters this year. Next year it plans to increase pro- duction to 12,000 computers. Will its average cost of production increase or decrease? Explain.

Answers

Maurice Tutor
(5)
Status NEW Posted 29 Sep 2017 12:09 AM My Price 4.00

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