# PRODUCTION, COST, & PERFECT COMPETITION - 77685

Request Posted by

## lboogie29154

Rating : No Rating
Earned: \$0
Request Detail
Price: \$10
• From: Economics, Microeconomics
• Due on: Sat 05 Sep, 2015 (06:39am)
• Asked on: Wed 26 Aug, 2015
• Due date has passed, but you can still Post Solution.
Description

A firm currently uses 40,000 workers to produce 180,000 units of output per day. The daily wage per worker is \$100, and the price of the firm's output is \$28. The cost of other variable inputs is \$500,000 per day. (Note: Assume that output is constant at the level of 180,000 units per day.)

Assume that total fixed cost equals \$1,200,000. Calculate the values for the following four formulas:

• Total Variable Cost = (Number of Workers x Worker’s Daily Wage) + Other Variable Costs
• Total Costs = Total Variable Costs + Total Fixed Costs
• Total Revenue = Price * Quantity
• Average Variable Cost = Total Variable Cost / Units of Output per Day
• Average Total Cost = (Total Variable Cost + Total Fixed Cost) / Units of Output per Day

Complete the following:

• Calculate the firm’s profit or loss. Is the firm making a profit or a loss?
• Explain the Short Run Shut Down Rule. Should this firm shut down? Please explain.
• Provide a report to the management of the firm that discusses what should be done.

Be sure to show your work to support the decision that you outline in your report.

3 Solution for PRODUCTION, COST, & PERFECT COMPETITION
Title Price Category solution By purchased
Financial Status of Firm
\$5.00 Teach 0 time(s)
Finances Within a Firm
\$10.00 Lewin 0 time(s)
Finances of the Firm
\$8.00 RNguyen99 0 time(s)
Please Login or Register to Submit the Solution for the Request