-Suppose the Local Newspaper Hires Students to Fold and Bag

question 291

Essay

-Suppose the local newspaper hires students to fold and bag newspapers for delivery and pays them $20 per shift. Five students can fold and bag 300 newspapers per shift. The fourth student added 50 newspapers to total output. The capital cost is fixed at $50 per shift.
a) Is the newspaper operating in the long run or short run? Why?
b) What is the average product of 5 students?
c) Calculate the total fixed, total variable, and total costs of folding and bagging 300 newspapers.
d) Calculate the average fixed, average variable, and average total costs of folding and bagging 300 newspapers.
e) What is the marginal cost of one of the 50 newspapers folded and bagged by the fourth student?

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Definitions:

Pass Title

The transfer of ownership rights of a property or asset from one party to another, typically through a legal document or deed.

Subsurface Rights

Legal rights to the minerals, oil, gas, and other resources located below the surface of a piece of property.

Surface Subsides

The phenomenon of ground levels sinking or settling, which can result from natural processes or human activities such as mining or excessive groundwater extraction.

Profit

The financial gain achieved when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.