Apu Leases 2 Squishy Machines to Produce 40 Squishies in the Short

question 142

Essay

Apu leases 2 squishy machines to produce 40 squishies in the short run. Apu's short-run cost function is: C(q, K) = 0.85
+ 0.5K, where q is the number of squishies produced and K is the number of squishy machines used. Apu's long-run cost function is: C_LR (q) = 1.13q^2/3. If Apu decides to lease 7 squishy machines, what happens to Apu's short-run average total cost of producing 40 squishies? Does Apu's long-run cost function exhibit increasing, constant, or decreasing returns to scale?

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United States

A country located in North America, consisting of 50 states, a federal district, and several territories.

Collective Bargaining

The process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, and other aspects of workers' compensation and rights.

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A desired result or outcome that an individual or organization aims to achieve.