(Table) Based on the Table, Suppose the Firm Experiences Fixed

question 82

Multiple Choice

(Table) Based on the table, suppose the firm experiences fixed costs of $35. At two units of production, the firm would have total costs of
$\begin{array}{|l|l|}\hline \boldsymbol{Q} & \boldsymbol{V C} \\\hline 0 & \$ 25 \\\hline 1 & \$ 40 \\\hline 2 & \$ 55 \\\hline 3 & \$ 70 \\\hline 4 & \$ 85 \\\hline\end{array}$

• A) $60.
• B) $20.
• C) $90.
• D) $55.

---

Definitions:

Shirking

Shirking describes when employees underperform or exert less effort than expected because of insufficient incentives or the absence of effective monitoring.

Perfectly Inelastic

Describes a situation where the quantity demanded or supplied does not change in response to a change in price; the demand or supply curve is vertical.

Labor Supply Curve

A visual diagram that illustrates the connection between the salary provided and the amount of work employees are ready to offer.

Competitive Firm

A company operating in a market where there are many buyers and sellers, and no single entity can influence the market price.