You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function qequals5KL where q is the number of engines per week, K is the number of assembly machines, and L is the number of labor teams. Each assembly machine rents for requals$10 comma 000 per week, and each team costs wequals$5 comma 000 per week. Engine costs are given by the cost of labor teams and machines, plus $3 comma 000 per engine for raw materials. Your plant has a fixed installation of 5 assembly machines as part of its design. The total cost of producing q units of output (TC) is:

$2200

Explanation:

will be Lq25.The total cost function is thus given by the sum of the costs of capital, labor, and rawmaterials:TC(q) = rK +wL +2000q = (10,000)(5) + (5,000)(q25) + 2,000 qTC(q) = 50,000 +2200q.The average cost function is then given by:AC(q) TC ( q ) q  50,000  2200 q q . and the marginal cost function is given by: MC ( q )   TC  q  2200.

unique selling propisition

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.