A call centre rents office space in a business park, where they have signed a 24-month lease.
Question:
A call centre rents office space in a business park, where they have signed a 24-month lease. The rent they pay is $200 per week. The call centre hires only casual staff at a rate of $50 per worker per week. For the purposes of this exercise, assume that there are no additional costs incurred for the call centre.
Table: Productivity and cost analysis
L | Q(TP) | MP | TFC | TVC | TC | MC | AVC | ATC |
0 | 0 | 200 | 0 | n/a | n/a | n/a | n/a | |
1 | 20 | 200 | 50 | |||||
2 | 44 | 200 | 100 | |||||
3 | 60 | 200 | 150 | |||||
4 | 72 | 200 | 200 | |||||
5 | 80 | 200 | 250 | |||||
6 | 84 | 200 | 300 | |||||
7 | 84 | 200 | 350 | n/a | ||||
8 | 80 | 200 | n/a | n/a | n/a | n/a | n/a |
Required:
From the given information regarding labour (L), Total Productivity [Q(TP)], total fixed cost (TFC) and total variable cost (TVC) in the above table, calculate the respective (i) marginal productivity (MP), (ii) total cost (TC), marginal cost (MC), (iii) average variable cost (AVC), and (iv) average total cost (ATC) figures in the response table.