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

question 141

Essay

Apu leases 2 squishy machines to produce 40 squishies in the short run. Apu's short-run cost function is: where q is the number of squishies produced and K is the number of squishy machines used. Apu's long-run cost function is: 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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Definitions:

Project Participants

Individuals or groups who have a stake in the success and outcomes of a project.

Project Story

A narrative that outlines the journey of a project, including its challenges, milestones, solutions, and achievements.

Explanation

Providing information or clarification about a topic or concept to aid in understanding.

Team Members

Individuals who are part of a group working together towards a common goal or project.