Refer to the Following

question 24

Multiple Choice

Refer to the following:
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000.

-When the firm uses 40 units of labor, what is AVC at this level of output?

• A) $120
• B) $400
• C) $40
• D) $70
• E) $86

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