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a7q8 - Apiia Stud-en Question “findciws Internet Emlorer...

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Unformatted text preview: Apiia: Stud-en! Question , “findciws Internet Emlorer fire. to: 5m rewa- Help- - __ _ _ Webnm,1rademmimml-WEIMLM out C9 . Econ ram—mums) ' ' ' atI? ' " L... The Cost of Production in the Long Run II Graded Assignment | Back tn Assignment Due Sunday 11.21.10 at 11:45 PM » EMU-”fihahx 8. Babylon high-rise constnmfion Babylon is a construction oompany specializing in high-rise buildings. Babylon‘s average cost (AC) curve is given by the equaiion A6 = 5000'5 where G E the numberof high rim being built thatyear, and AC is the cost per building in millions of dollars. Babyion discovers that, for every 1!] high rises built, its average cost decreases by $5 million. a. This cost funcbon a learning curve effect. This cost function has economies ofscale. Ly I b. For its first yearof production, Babylon plans to build four buildings. The average cost per building is $100 milion. :J For its filth year of production, after completing 20 high-rises in past years, Babylon again plans to build four buildings that yeah The average cost per building is $90 million. a. :‘(Jesmns i'oDl 1.23 nauyngh: :5. gum-2am; Aplia tnc. an “gm: reserved. O lnttmel [Prmcclcd Mode On amuse. - ...
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