Unformatted text preview: a. What is the cost function for your plant — namely, how much would it cost to produce q engines? What are average and marginal costs for producing q engines? How do average costs vary with output? b. How many teams are required to produce 250 engines? What is the average cost per engine? c. You are asked to make recommendations for the design of a new production facility. What capital/labor (K/L) ratio should the new plant accommodate if it wants to minimize the total cost of producing any level of output q?...
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This note was uploaded on 12/28/2009 for the course ECON 120 taught by Professor Walsh during the Fall '09 term at University of Illinois, Urbana Champaign.
- Fall '09