Ronald's Outboard Motor Manufacturing plant has the following short-run cost function: 1500q AK C(q, A,K) =...

Transcribed Image Text:

Ronald's Outboard Motor Manufacturing plant has the following short-run cost function: 1500q² A²K C(q, A,K) = where q is the number of motors produced, K is the number of machines leased, and A is a productivity factor of technology. Currently, A is 25 and Ronald uses 20 machines. Ronald is investigating a new production technique. If he adopts the new technique, the productivity factor will become 36. If Ronald adopts the new technique, what is his average total cost of manufacturing 140 motors? Did the increase in the productivity factor increase or decrease the average total cost of producing 140 motors? + 500K Ronald's Outboard Motor Manufacturing plant has the following short-run cost function: 1500q² A²K C(q, A,K) = where q is the number of motors produced, K is the number of machines leased, and A is a productivity factor of technology. Currently, A is 25 and Ronald uses 20 machines. Ronald is investigating a new production technique. If he adopts the new technique, the productivity factor will become 36. If Ronald adopts the new technique, what is his average total cost of manufacturing 140 motors? Did the increase in the productivity factor increase or decrease the average total cost of producing 140 motors? + 500K

Answer rating: 100% (QA)

The shortrun cost function given is CqAK 1500q2A2K 500K We need to calculate Ronalds average total c... View the full answer