Answer to Question #167155 in Microeconomics for Sri Raagav

Question

Cosider a office cleaning firm that currently faces $24 in fixed cost and $8 hourly wages for workers. The prcie the firm gets for each office cleaned in a latge office building is $56 at present equilibrium. The produxtiok function of the firl is shown below.

no. Of offices cleaned - hours taken

0 offices - 0 hours

1 offices- 5 hours

2 offices- 9 hours

3 offices- 15 hours

4 offices- 22 hours

a) find marigan cost and average total cost

Answer 1

fixed cost$=\$24,$ Hourly wage$=\$8($ cost to firm), price of each office cleaned$=\$56$