The Following Graph Shows the Marginal and Average Product Curves

question 16

Multiple Choice

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,what is AVC at this level of output?

• A)$120
• B)$400
• C)$40
• D)$70
• E)$86

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