Production Costs for Manufacturing T-Shirts Consist of a Fixed Cost

question 34

Multiple Choice

Production costs for manufacturing T-shirts consist of a fixed cost of $18,000 plus variable costs of $4 per shirt. Each T-shirt sells for $12 dollars. What is the marginal cost?

• A)$4
• B)$12
• C)$8
• D)$18,000

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Definitions:

College

An institution of higher education offering undergraduate or graduate degrees.

Factor of Production

A factor of production is an economic resource utilized in the creation of goods or services, including labor, land, capital, and entrepreneurship.

Total Income

The sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings received by an individual or business in a given period.

Compensation of Employees

Refers to the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done.