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# Solving a Firm's Costs

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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 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.

https://brainmass.com/economics/pricing-output-decisions/solving-firms-costs-261744

#### Solution Preview

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.