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Overview:
The Excel-based assignments examine the use of data in business decision making. In this assignment short-run cost minimization is examined given variable costs that change with quantity produced and fixed costs that cannot be changed in the short-run.
Action Items:
- Download the Short Run Costs Excel worksheet provided by your professor.
- Your instructor will provide values for the following cost:
- Fixed Equipment
- Materials per Worker
- Each Worker (up to 5)
- Each Worker (after 5)
- Fill in the fixed cost, variable cost, and total costs for the seven labor/output scenarios.
- Calculate average fixed cost, average variable cost, average total costs, and marginal costs and determine the cost minimization output for the firm.
- Examine the chart that will appear on the Excel spreadsheet after you input the data.
- Write a 1-page business brief describing the relationship among the costs. Include a copy of the graph showing cost minimization output.
