00:01
And older smaller low -tech facility.
00:04
Each month the high -tech facility handles 10 ,000 claims incurred 1 ,000 in fixed cost and 10 ,000 in variable cost.
00:16
Each month, the low -tech facility handled 2 ,000 claims incur 16 ,000 in fixed cost and 24 ,000 in variable cost.
00:26
If you anticipate a decrease in the number of claims, where will you? you lay off workers.
00:37
So here we use the marginal cost analysis.
00:41
Understanding how cost behave with increase or decrease in production is an example of marginal cost analysis.
00:50
More specifically, we can determine the variable cost of performing an activity to identify how change in activity label will impact cost.
01:01
Now moving towards the question.
01:04
Here it is given each month the high -tech facility handles 10 ,000 claims and incur dollar one -lack fixed cost and dollar 10 ,000 variable cost.
02:22
And each month low -tech facility handles 2 ,000 claims and incur $16 ,000 in fixed cost and dollar $24 ,000 in variable cost...