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A firm currently uses 50,000 workers to produce 120,000 units of output per day. The daily wage per worker is $100, and the price of the firm's output is $48. The cost of other variable inputs is $400,000 per day.
Assume that total fixed cost equals $900,000. Calculate the values for the following four formulas:
Complete the following:
Provide a report to the management of the firm that discusses what should be done.
Be sure to show your work to support the decision that you outline in your report.
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