# BUS 640 Week 3 Production Cost Analysis and Estimation Applied Problems 1

This file of BUS 640 Week 3 Production Cost Analysis and Estimation Applied Problems includes:

a. Which inputs are fixed and which are variable in the production function of Jennifer Trucking Company? Over what ranges do there appear to be increasing, constant and/or diminishing returns to the number of drivers employed?

fixed = trucks varible=gas, oil, drivers wages

b. What number of drivers appears to be most efficient in terms of output per driver?

c. What number of drivers appears to minimize the marginal cost of transportation assuming that all drivers are paid the same salary?

a. Derive average variable cost (AVC) data from the data in this table.

c. Suppose that demand is estimated to move from its present (May) level of 3,500 units to 4,000 units next month (June). What is the incremental cost of meeting this demand?

d. Assuming that Palm

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