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Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022 Exercise 16
The Robotics Corporation produces cuddly toys using only computer-driven robots. The quantity of toys (T) produced per year is given by T = 10 
where R is the number of robots used during each year of production.
a. If the market price of robots is $2,000, the real interest rate is 0.05, and the depreciation rate on robots is 0.10, what is the firm's implicit rental rate for robot use?
b. What is the firm's total cost function for production of T?
c. If cuddly toys sell for $60, how many will this firm choose to produce? (Hint: If Total Cost = kT 2 , then calculus shows that Marginal Cost = 2kT.)d. How many robots will the firm employ for the year?
where R is the number of robots used during each year of production.a. If the market price of robots is $2,000, the real interest rate is 0.05, and the depreciation rate on robots is 0.10, what is the firm's implicit rental rate for robot use?
b. What is the firm's total cost function for production of T?
c. If cuddly toys sell for $60, how many will this firm choose to produce? (Hint: If Total Cost = kT 2 , then calculus shows that Marginal Cost = 2kT.)d. How many robots will the firm employ for the year?
Explanation
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a) The production function for toys is g...
Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
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