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    Solving a Firm's Costs

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    Please help with the following problem.

    1) Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below:
    (see attached file for table)

    2) How would each of the following affect the firm's marginal, average, and average variable cost curves?
    a. An increase in wages
    b. A decrease in material costs
    c. The government imposes a fixed amount of tax.
    d. The rent that the firm pays on the building that it leases decreases.

    © BrainMass Inc. brainmass.com October 9, 2019, 11:36 pm ad1c9bdddf
    https://brainmass.com/economics/pricing-output-decisions/solving-firms-costs-261744

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    1) Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below:

    (see attached file for completed table)

    2) How would each of the following affect the firm's marginal, average, and average variable cost curves?
    a. An increase in wages
    b. A decrease in material costs
    c. The government imposes a fixed amount of tax.
    d. The rent that the firm pays on the building that it leases decreases.
    Answer:
    (a) An increase in the wages will increase the marginal, average and the average variable cost and hence the curves will get pushed up ...

    Solution Summary

    This solution helps with problems involving a firm's costs. including variable costs, wages and material costs.

    $2.19