The Capital Stock Is Fixed at 50 Units,the Price of Capital

question 34

Multiple Choice

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. $$\begin{array} { c c } \text { Output } & \begin{array} { c } \text { Average } \\\text { Variable Cost }\end{array} \\\hline 10 & \$ 40 \\20 & 30 \\30 & 45 \\40 & 60\end{array}$$ Given the above,how much does the 23rd unit of output add to the firm's total cost?

• A)$75
• B)$135
• C)$750
• D)$1,350
• E)none of the above

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Definitions:

Accounting Costs

The recorded expenses in the financial statements of a company, including both fixed and variable costs incurred during business operations.

Sunk Costs

Costs that have already been incurred and cannot be recovered.

Foregone Opportunities

Benefits or earnings that are missed out on when choosing one alternative over another.

Accounting Costs

The actual expenses and cash outlays that a business incurs, which are recorded in its financial statements.