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A business whose only inputs are labour and capital expands its employment level in the long run from 18 to 27 workers and its capital

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A business whose only inputs are labour and capital expands its employment level in the long run from 18 to 27 workers and its capital from 6 to 9 machines. Write out dollars and cents, e.g. $1.00 or $0.10 for any monetary amounts entered as a solution below. Assuming that the daily wage of $100 and the daily upkeep (including wear and tear) per machine of $20 remain constant in the long run, identify the relevant returns to scale and the change in long-run average cost if daily output were to expand in each of the following possible ways. a. If daily output expands from 130 to 260 units then in this output range the business is experiencing | increasing @ returns to scale while long-run average cost is falling . At 130 units long-run average cost is $ 14.77 @ and at 260 units it is $ | 11.08 b. If daily output expands from 130 to 195 units then in this output range the business is experiencing returns to scale while long-run average cost is staying the same | . At 130 units long-run average cost is $ 14.77 @ and at 195 units it is $ 14.77 c. If daily output expands from 130 to 173 units then in this output range the business is experiencing decreasing @ returns to scale while long-run average cost is rising . At 130 units long-run average cost is $ 14.77 @ and at 173 units it is $ 14.76

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