Course:MATH110/Archive/2010-2011/003/Teams/Graubunden/Homework 11

Describe the Model

The model

Average Cost increases to Infinity

An interesting model could be the creation of a product while using intermediate materials of massive scarcity. Consider this: a temple (large structure) made solely of the rare material platoninium. Unfortunately there exists only 10,000 tonnes of this material on earth, and each new temple requires exactly 3,000 tonnes. Barring space travel, there only exists enough of the resource to create 3 of these temples, as the fourth temple would run out of platoninium before completion. Assuming that there is a high demand for these temples, the price of these temples, after three, would exceed infinity, in the short run, as it is impossible to complete with any resource left on earth.