City Ambulance Service estimates the monthly cost of responding to emergency cal

Question

City Ambulance Service estimates the monthly cost of responding to emergency calls to be $19,500, plus $110 per call....... a. In a month in which the company responds to 125 emergency calls, determine the estimated:....... 1. Total cost of responding to emergency calls........ 2. Average cost of responding to emergency calls...... b. Assume that in a given month, the number of emergency calls was unusually low. Would you expect the average cost of responding to emergency calls during this month to be higher or lower than in other months? Explain......

Explanation / Answer

Hi, Please find the answers as below: Part 1 : 19500 + 110*125 = 33250 Part 2: 33250/125 = 266 per call Part 3: It will be higher because of constant fixed cost of $ 19500. Thanks, Aman

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