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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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