A moving company has $20 in fixed costs per day and pays an hourly wage of $10 per worker.The moving company is paid $80 for each room of furniture it moves.The daily production function of the firm is as follows:
(A)Calculate marginal cost and average total cost for this typical firm.
(B)How many rooms of furniture will this firm move in the short run? What are the profits or losses of the firm?
(C)What will be the long-run adjustment in this industry? What will be the long-run price and output for a typical firm in this industry?
Correct Answer:
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This firm will move 4 rooms of ...
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