Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 12 Nov 2017 My Price 9.00

Venture capitalist Sarah

Venture capitalist Sarah purchases two firms to produce widgets. Each firm produces identical products and each has a production function given by

a. If Sarah wishes to minimize short-run total costs of widget production, how would output be allocated between the two firms?

b. Given that output is optimally allocated between the two firms, calculate the short-run total and average cost curves. What is the marginal cost of the 100th widget? The 125th widget? The 200th widget?

c. How should Sarah allocate widget production between the two firms in the long run? Calculate the long-run total and average cost curves for widget production.

d. How would your answer to part c change if both firms exhibited diminishing returns to scale?

Answers

Maurice Tutor
(5)
Status NEW Posted 12 Nov 2017 12:11 PM My Price 9.00

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