Always Round Tire Has a Production Function of Q =

question 37

Essay

Always Round Tire has a production function of Q = 300 L^.75 K^.5.If Always Round Tire doubles the size of its production facility-increasing L from 250 to 500 and K from 25 to 50 -what happens to the cost of production,even though we do not know the wages of labor or the price of capital?

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Definitions:

Contract Breach

An act of breaking the terms set out in a contract, which can result in legal action for enforcement or damages.

Capacity

Refers to the legal ability of a party to enter into a contract.

Installation

is the process of setting up or assembling a piece of equipment or system in its place of operation.

Consequential

Referring to outcomes or results that follow as a direct or indirect effect of an action, often used in the context of damages in legal settings.