Johnsenn's hydrogen car manufacturing plant leases 50 capital and produces 25 hydrogen cars per period. Johnsenn's short-run
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Question:
Johnsenn's hydrogen car manufacturing plant leases 50 capital and produces 25 hydrogen
cars per period. Johnsenn's short-run cost function is: C (q, K ) = 15 q5 where q is the K5/2+200K
number of hydrogen cars produced and K is the number of capital. Johnsenn's long-run cost function is: CLR(q) = 173.5578q10/7. At Johnsenn's current short-run plant size, calculate Johnsenn's short-run average total cost of production. If Johnsenn would lease 11 more capital in the short run, will his short-run average total cost of producing 25 hydrogen cars increase or decrease? Does Johnsenn's long-run cost function exhibit increasing, constant, or decreasing returns to scale?
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