Refer to the Following Figure

question 91

Multiple Choice

Refer to the following figure:
The price of capital is $50 per unit.
-How many units of labor should the firm use in order to produce 400 units of output at the least cost?

• A) 100
• B) 105
• C) 110
• D) 115

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Definitions:

Operating Expenses

Expenses incurred from the normal operations of a business, excluding the cost of goods sold.

After-Tax Discount Rate

The interest rate used in discounted cash flow analysis that accounts for the impact of taxes on the rate of return.

Income Tax Rate

The share of an individual's earnings that is paid to the government as a tax.

Straight-Line Depreciation

Straight-line depreciation is a method of calculating the depreciation expense of an asset evenly over its useful life.