Homework: Chapter 11, Assignment 2 Save Score: 0 of 1 pt 16 of 25 (11 complete)

Question

Homework: Chapter 11, Assignment 2 Save Score: 0 of 1 pt 16 of 25 (11 complete) HW Score: 40%, 10 of 25 pts Concept: Fixed/Variable Costs 4 Question Help * A county government hires lawyers to defend itself in lawsuits The local government provides its legal staff with an office building The table below shows how many cases can be handled with different numbers of lawyers over the course of a year Lawyers Office Buildings Cases 18 42 54 60 63 5 Suppose each lawyer is paid $80,000 per year and the office building is rented for $400,000 per year If the county decides to hire 3 lawyers to handle 54 lawsuits, what will be the average fixed cost of each casey What will be the average variable cost of each case? The average fixed cost of each case wil be S per year, and the average variable cost will be S using real numbers rounded to two decimal places) Enter n mere responses

Explanation / Answer

VC = 80000 x Number of lawyers

FC = $400000

AFC = FC/Cases

AVC = VC/Cases

3 lawyers:

AFC = 400000/54 = $7407.41

AVC = 3 x 80000/54 = $4444.44

Lawyers Cases FC ($) VC ($) AFC ($) AVC ($) 0 0 400000 0 1 18 400000 80000 22222.22 4444.44 2 42 400000 160000 9523.81 3809.52 3 54 400000 240000 7407.41 4444.44 4 60 400000 320000 6666.67 5333.33 5 63 400000 400000 6349.21 6349.21

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