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Satsume Satsume
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6 years ago
Homer's boat manufacturing plant leases 50 hydraulic lifts and produces 25 boats per period.  Homer's short-run cost function is: C(q, K)  = 15  + 200K, where q is the number of boats produced and K is the number of hydraulic lifts.  Homer's long-run cost function is: 
CLR (q) = 173.5578q10/7.  At Homer's current short-run plant size, calculate Homer's short-run average total cost of production.  If Homer would lease 11 more hydraulic lifts in the short run, will his short-run average total cost of producing 25 boats increase or decrease?  Does Homer's long-run cost function exhibit increasing, constant, or decreasing returns to scale?
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Microeconomics

Microeconomics


Edition: 8th
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Bart_argBart_arg
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Satsume Author
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6 years ago
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