Refer to the Following:
the Capital Stock Is Fixed at 5

question 62

Multiple Choice

Refer to the following:
The capital stock is fixed at 5 units, the price of capital is $60 per unit, and the price of labor is $20 per unit.

$$\begin{array} { c c } \text { units of } & \text { units of } \\\text { Labor } & \text { Output } \\\hline 2 & 10 \\4 & 26 \\0 & 46 \\8 & 60 \\10 & 72 \\12 & 80\end{array}$$
-If the firm produces 80 units of output, what is its total cost of production?

• A) $540
• B) $1,600
• C) $1,900
• D) $5,040
• E) none of the above

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Definitions:

Marginal Revenue (MR)

The revenue derived from selling one additional unit of output.

Marginal Cost

The additional expense associated with manufacturing one extra unit of a product, emphasizing the cost variation.

Marginal Revenue

The additional income that is generated by selling one more unit of a product or service.

Loss Minimization

A strategy in economics and business focused on reducing the losses incurred by a firm or individual to the lowest possible level.