Sunday, August 22, 2010

Help/advice calculating Economics problem?

Would like some help/advice how to tackle this problem. Thanks!





A clinic pays its nurses $20 an hour. It also pays $100 a week rent and has other weekly overhead costs of $50. Supply costs are $1 per patient. The short-run production function, relating patient visits and nursing hours, is shown below.





Patient visits= 1 2 3 4 5 6


Nursing hours = 2 4 8 14 22 32








So, how would I calculate the total variable costs, total fixed costs, and total costs, average costs and marginal costs at each output level.Help/advice calculating Economics problem?
Total variable costs are $20 per nursing hour plus $1 per patient. Total fixed costs are $150, regardless of output level. Total costs are the sum of total variable costs and total fixed costs. Average costs are the total costs divided by the number of patient visits. Marginal costs are the total variable costs at each level minus the total variable costs at the previous level.





patients tvc tfc tc ac mc:





0 0 150 150 0 0


1 41 150 191 191 41


2 82 150 232 116 41


3 163 150 313 104.33 81


4 284 150 434 108.5 121


5 445 150 595 119 161


6 646 150 796 132.67 201

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