For Firm A,when 4 Units of Labor,the Only Variable Input

question 197

Multiple Choice

For Firm A,when 4 units of labor,the only variable input into the production process,are hired,the firm produces 50 units of output.If the fixed cost of production is $4,the variable cost per unit of labor is $20,and the marginal product of labor for the fifth unit of labor is 2,what is the average total cost of production when labor is 5 units?

• A)$2.00
• B)$20.00
• C)$20.80
• D)$22.80

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Definitions:

Cost Of Goods Sold

The costs directly related to the creation of products sold by a company, including expenses for raw materials and wages.

Worksheet

A paper or electronic tool used by accountants to gather information for adjusting entries and preparing financial statements.

Trial Balance

A list of accounts and their balances at a given time.

Terms 2/10 N/30

Terms 2/10 N/30 is a commercial credit term indicating that a buyer can deduct 2% of the invoice amount if payment is made within 10 days; otherwise, the full invoice amount is due in 30 days.