For Each Carload of Ore Removed from the Matchless Mine

question 35

Multiple Choice

For each carload of ore removed from the Matchless Mine, 1 pound of lead and 1 ounce of silver is smelted.The cost of mining and processing 1 carload of ore is C(Q) = 700 + 2Q + 0.09Q².The demand for silver (per ounce) is P_s = 40 - 0.30Q_s and the demand for lead (per pound) is P_l = 5 - 0.02Q_l.What should the owners of the Matchless Mine do to maximize profits (in the long run) ?

• A)Mine and process 52.44 carloads of ore, sell 52.44 ounces of silver, and sell 52.44 pounds of lead.
• B)Mine and process 66.67 carloads of ore, sell 66.67 ounces of silver, and sell 13.64 pounds of lead.
• C)Mine and process 125 carloads of ore, sell 66.67 ounces of silver, and sell 125 pounds of lead.
• D)Mine and process 125 carloads of ore, sell 48.72 ounces of silver, and sell 125 pounds of lead.
• E)Shut down the mine.

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Definitions:

Opportunity Cost

The cost attributed to the refusal of the immediately lesser appealing option during decision-making.

Target Rate

A target interest rate set by the central bank in a country that guides monetary policy decisions, aiming to control inflation, encourage borrowing, or stabilize the economy.

Inflation

A measure of the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Money Supply

A comprehensive sum of money in an economy at any given point, covering cash, coins, and the funds maintained in demand and savings deposits.