Figure 18-1 on the Graph, L Represents the Quantity of Labor and Labor

question 410

Multiple Choice

Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week.
-Refer to Figure 18-1. Suppose the firm sells its output for $15 per unit, and it pays each of its workers $750 per week. When output increases from 210 units to 285 units, the

• A)marginal cost is $10 per unit of output.
• B)marginal revenue is $5 per unit of output.
• C)value of the marginal product of labor is $4,275
• D)firm's profit decreases.

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Definitions:

Cost-Plus Approach

A pricing strategy where a fixed percentage or a fixed amount is added to the cost of producing a product to determine its selling price.

Markup

The amount added to the cost price of goods to cover overhead and profit.

Selling Expenses

Costs incurred directly from the sale of goods or services, including advertising, sales commissions, and the salaries of sales staff.

Total Manufacturing Costs

The complete sum of all expenses directly involved in the production of a product, including direct materials, direct labor, and manufacturing overhead.