Consider a Firm with Two Technologies to Choose Between When

question 112

Essay

Consider a firm with two technologies to choose between when producing output.The cost function when using technology 1 is given by:
c₁(q)= 3600 + 65q + 36q²
The cost function when using technology 2 is given by:
c₂(q)= 900 + 900q +q^{2
Assume that the firm can only implement one of the two technologies at a time.}
a.If the firm wishes to produce output at the lowest per-unit cost,which technology should it choose and how much output should it produce?
b.Which technology should the firm choose if it wishes to produce 15 units of output? What about 25 units of output?

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Definitions:

Set of Data

A collection of related pieces of information, typically measurements or observations, that are analyzed to derive a conclusion.

Mean

The mean of a number set, found by summing all the numbers together and then dividing by the total number of values in the set.

Equal

Denotes being the same in quantity, size, degree, or value.

Data

Quantitative or qualitative values that represent information or attributes, often collected to analyze patterns or trends.