Consider a firm with marginal costs of MC=70+2Q. The firm is considering investing in research and development to find a production process that will allow it to make its output using less raw material inputs. The new production process is expected to lower the firm's marginal costs to MC=(70-10)+2Q.
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- A manufacturing Company has estimated its quarterly demand (units) as shown in the following table. It expects the next demand cycle to be similar to this one and wishes to restore ending inventory, employment, etc., to beginning levels accordingly. Quarter Units 1st 2250 2nd 2800 3rd 1700 4th 1600 Each quarterly change of 300 units output has an incremental labour cost of OMR. 1,600, and ending levels must be restored to initial levels. What is the cost associated with changing the work force size? (Write the number only) Answer:Imagine you are running a business that processes horticultural product, and is currently producing 40,000 tonnes of product per year. The average cost of producing 40,000 tonnes is $600 per tonne. A buyer for a large supermarket chain comes along and offers to buy an extra 10,000 tonnes of your product at a price of $300 per tonne. This price is much less than the average cost of production for the current annual output. With the current production system of the business, the marginal cost per tonne of producing an extra tonne is $200/ton. 1. Would you accept or reject this offer, and why? 2. What principles underlie your reasoning in deciding whether to accept or reject this offer?Suppose a firm expects that a $40 million expenditure on R&D in the current year will result in a new product that can be sold next year. Selling that product next year will increase the firm's revenue next year by $60 million and its costs next year by $54 million. Instructions: Enter your answer as a whole number. a. What is the expected rate of return on this R&D expenditure? percent
- A firm faces the following costs: total cost of capital = $8,000; price paid for labor = $20 per labor unit; and price paid for raw materials = $6 per raw-material unit. Initially, the firm can produce 2,000 units of output by combining its fixed capital with 250 units of labor and 400 units of raw materials. After the firm improves its production process, it can produce 5,000 units of output by combining its fixed capital with 150 units of labor and 300 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. plz answer correct asap dont answer by pen peparWatchshop is a watch manufacturing company that sells low-end wrist wacthes. They hire labour at the rate of tk. 4930.0 per worker and their fixed cost is equal to tk. 8047.0 per week. The table below is the product schedule of Watchshop Labour (workers hired per week) Output (watches produced per week) 1 40.0 2 80.0 3 130.0 170.0 200.0 6 220.0 7 230.0 (a) What is the total cost, when output is 130.0?You've been hired by an unprofitable firm to determine whether it should shut down its operation. The firm currently uses 70 workers to produce 300 units of output per day. The daily wage (per worker) is 100 ETB, and the price of the firm's output is 30 ETB. The cost of other variable inputs is 500 ETB per day. Although you don't know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue. You know that the marginal cost of the last unit is 30 ETB. Should the firm continue to operate at a loss? Carefully explain your answer.
- A local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?. Determinethe Marginal cost and interpret the results.Provethatthetechnologyf(L,K)=L2+K2 exhibitsincreasingreturnstoscale. What is the formula for the average product of capital? For the total cost curve TC(q) = q3, prove the technology exhibits decreasing returns to scaleOuroboros’ total cost (TC) as a function of its production level q is given by the equationbelow:TC(q) = 2?² − 12,000q + 30,000,000a. How much is the fixed cost of production for Ouroboros? b. If q=5,000, how much is the total cost for Ouroboros? c. Evaluate the marginal cost for Ouroboros when q=3,000. d. For this part, suppose that Ouroboros has two corporate customers. The firstcorporations’ demand as a function of Ouroboros’ price is given by ??(?) = 10,000 − ? and the second corporation’s demand function is given by ??(?) = 20,000 − ?.Calculate Ouroboros’ maximum possible profit level.
- Q2. Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has a determined that if a truck is driven 105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometers. If a truck is driven only 70,000 kilometers during a year, the average operating cost increases to 13.4 cents per kilometer. (The Singapore dollar is the currency used in Singapore). a. Using the high-low method, estimating the variable and fixed cost elements of the annual cost of the truck operation. b. Express the variable and fixed costs in the form Y= a + bx. c. If a truck were driven 80,000 kilometers during a year, what total cost would you expect to be incurred?Whoville Marble Works (WMW) produces Bespoke Marble Kits (BMKs) for discerning marble connoisseurs. To produce their BMKS, WMW uses raw materials, labor and energy, and their production function is given by q = 2070-410.250.35, where o q = WMW's monthly output, measured in BMKS, or = WMW's monthly raw material input, measured in tons, • 1 = WMW's monthly labor input, measured in hours of labor, • m = WMW's monthly energy input, measured in megawatt hours. Raw material costs WMW $100/ton, labor costs WMW $30/hour and energy costs WMW $50/megawatt hour. Find the input levels of raw materials, labor and energy that maximize WMW's output, given that their monthly production budget is $30,000. What is the minimum cost?Your friend is thinking about opening a wine bar. He estimates that it would cost $400000 per year to rent the location and buy the stock, In addition he would have to quit his $120000 per year job as an accountant. Suppose your uncle thought he could sell $500000 worth of wine in a year. Which statement is true? Total cost of running the wine bar is $520000 and he should not open the wine bar since his economic profits will be negative. His economic profits are $120000 because that is what he could earn as an accountant Total cost of running the wine bar is $400000 and he should open the wine bar since his economic profits would be $100000. worth opening His accounting profits are $100000 which is enough to make the wine