The Capital Stock Is Fixed at 50 Units,the Price of Capital

question 6

Multiple Choice

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. Given the above,if the firm produces 40 units of output,what is total variable cost?

• A)$1.50
• B)$60
• C)$100
• D)$2,400
• E)none of the above

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Definitions:

Allocated

The process of distributing resources or costs among various accounts or departments based on a specific criteria or formula.

Indirect Expenses

Costs that are not directly linked to a specific product or service but are necessary for the general operation of a business, such as administration and marketing expenses.

General Benefit

A type of advantage or positive outcome that applies broadly, often in a nonspecific or nonexclusive manner.

Department Manager

An individual responsible for overseeing the operations, staff, and budget of a specific department within an organization.