A Firm Uses Labor as an Input in Production

question 61

Multiple Choice

A firm uses labor as an input in production.In the short-run,its average cost will reach a minimum where:

• A)average product of labor reaches a maximum.
• B)marginal product of labor reaches a maximum.
• C)marginal cost begins to increase.
• D)marginal cost equals average cost.

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Definitions:

Cost Of Goods Manufactured

The total cost of producing goods during a specific period, including labor, material, and overhead costs, ready for sale.

Raw Materials Purchases

Refers to the total cost incurred by a company for the acquisition of raw materials needed for production during a specific period.

Operating Expenses

Costs incurred during the normal operations of a business, excluding the costs of goods sold.

Just-In-Time Method

A production and inventory strategy that aims to reduce costs by receiving goods only as they are needed in the production process, minimizing inventory levels.