Dave's Stove-Top Popcorn Currently Has Three Full-Time Employees Who Are

question 16

Multiple Choice

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $1,500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1,500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows: What is the total cost if Dave relies on part-time employees to meet additional demand?

• A)$43,500
• B)$53,500
• C)$70,500
• D)$77,500

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Definitions:

Long-Run Average Total Cost Curve

A curve that shows the lowest average cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Declining Segment

A portion of a market that is experiencing a decrease in consumer demand or sales.

Inputs

Resources used in the production process to produce goods or services, including labor, raw materials, and capital.

Output

The total amount of goods or services produced by a company, industry, or economy over a given period.