In: Economics
The production manager of a clothing manufacturer estimates that the total annual cost of producing men’s suits is given by the equation: C = 5,000 + 4,100Q – 4.4Q2 + .004Q3. What is the minimum price the firm can accept to not shut down in the short run? Hint: Write your answer to two decimal places.
A firm produces 100 units of good A at a total cost of $1,500 and separately 200 units of good B at a cost of $2,000. By combining the production of A and B, it is possible to produce the same quantities of A and B respectively at a combined total cost of $2,250. Compute the economies of scope experienced by this firm. Hint: Write your answer to two decimal places.