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Explain concepts of microeconomics, assignment help
Assignment Objectives
Explain concepts of microeconomics
Interpret various forms of competition
Predict the overall performance of an economic system
Please use the following information and use it to complete a few calculations, and answer questions in your paper. The paper ought to be written as a brief (1-1.5 pages) report that includes your calculations and a short explanation of what the firm should do if it is making a loss.
A firm currently uses 40,000 workers to produce 100,000 units of output per day.
The daily wage per worker is $80, and the price of the firm’s output is $41. The cost of other variable inputs is $400,000 per day. Assume that total fixed cost equals $900,000. (Note: Assume that output is constant at the level of 100,000 units per day.)
Calculate the values for the following variables using the formulas that are given:
- 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
- Profit/Loss = Total Revenue – Total Costs
Complete the following:
- Is the firm making a profit or a loss?
- Explain the Short Run Shut Down Rule. Should this firm shut down? Please explain.
Be sure to show your work. Include a reference list.
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