Suppose That for a Particular Firm the Only Variable Input

question 329

Multiple Choice

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that marginal cost of the third worker hired is $40, and the average total cost when three workers are hired is $50. What is the total cost of production when three workers are hired?

• A)$50
• B)$90
• C)$120
• D)$150

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Definitions:

Return on Investment (ROI)

A measure of the profitability of an investment, calculated as the net profit of the investment divided by the initial cost.

Last Year's

Refers to the previous calendar or fiscal year relative to the current one.

Combined ROI

A metric that aggregates the return on investment (ROI) from multiple projects or investments to assess overall performance.

Investment Opportunity

A potential investment that could yield financial returns, often evaluated for its risk-reward profile.