Please!!!!!Please show your work!!!!!!! The table shows the production function
ID: 1129635 • Letter: P
Question
Please!!!!!Please show your work!!!!!!!
The table shows the production function of Jackie’s Canoe Rides. Jackie’s pays $100 a day for each canoe it rents and $50 a day for each canoe operator it hires.
Labour
(workers
per day)
Output
(rides per day)
Plant 1
Plant 2
Plant 3
Plant 4
10
20
40
55
65
20
40
60
75
85
30
65
75
90
100
40
75
85
100
110
Canoes
10
20
30
40
a. What is Jackie’s minimum efficient scale? (1 point)
b. Explain how Jackie’s uses its LRAC cost curve to decide how many canoe to rent. (1 point)
c. Does Jackie’s production function feature economies of scale or diseconomies of scale? (1 point)
Labour
(workers
per day)
Output
(rides per day)
Plant 1
Plant 2
Plant 3
Plant 4
10
20
40
55
65
20
40
60
75
85
30
65
75
90
100
40
75
85
100
110
Canoes
10
20
30
40
Question 1.- The table shows the production function of Jackie's Canoe Rides. (workers(ides per day) Jackie's pays $100 a day for each canoe it rents and $50 a day for each canoe operator it hires.* Labour Output- Plant 3* Plant 4- Plant 1 20- 40- 65- 75- 10- Plant 2 65-* 10- 20- 30 40- Canoes- 40 60 75* 85- 20- 85- 100* 110- 40-* 75- 90- 100 30 'a. What is Jackie's minimum efficient scale? (1 point)- b. Explain how Jackie's uses its LRAC cost curve to decide how many canoe to rent. (1 point) *c. Does Jackie's production function feature economies of scale or diseconomies of scale? (1 point)-Explanation / Answer
Firsly, find ATC curves for plants 1,plant 2, plant 3, plant 4.
Janoes pays $100 per canoe he rents and $50 per worker.
LATC is the minimum from all ATC's.
(a) Jackie's minimum efficient scale is the smallest quantity at which long run average cost is the lowest. So, Jackie's minimum efficient scale is 65 canoe rides at , where which one plant the average total cost is $38.46.
(b) Jackie's uses its long run average total cost curve by building the size of the plant that minimizes its long run average costs at the lvele of output that Jackie expects to produce.
(c) Jackie's production function has both economies of scale and diseconomies. Jackie has economies of scale upto 65 rides and diseconomies of scale for more than 65 rides.
Plant1 TC1 ATC1 Plant2 TC2 ATC2 Plant3 TC3 ATC3 Plant4 TC4 ATC4 LATC 20 (10)(100)+(10)(50)=1500 1500/20= 75 40 (20)(100)+(10)(5)=2500 2500/40= 62.5 55 (30)(100)+(10)(50)=3500 3500/55=63.63 65 (40)(100)+(10)(50)=4500 (4500/65)=69.2 62.5 40 2000 50 60 3000 50 75 4000 53.33 85 5000 58.82 50 65 2500 38.46 75 3500 46.67 90 4500 50 100 5500 55 38.46 75 3000 40 85 4000 47.05 100 5000 50 110 6000 54.54 40