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Consumer and Producer Theory A small marketing agency has the following cost structure. Monthly rent on office space = $5,000 Monthly wages of each copywriter
Consumer and Producer Theory
A small marketing agency has the following cost structure.
Monthly rent on office space = $5,000 Monthly wages of each copywriter = $2,000
Here are the units of output produced per month according to the number of copywriters hired.
No. of copywriters | Units produced per month |
1 | 30 |
2 | 55 |
3 | 75 |
4 | 90 |
5 | 100 |
6 | 108 |
7 | 114 |
8 | 118 |
9 | 116 |
10 | 117 |
Till what number of copywriters was the firm experiencing economies of scale?
Please find below formula for your reference: Average Total Cost = Total Cost / Number of units produced
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