Refer to the following:
The price of capital is $12 per unit.

-If the price of labor is $30 per unit, the lowest possible cost of producing 200 units of output is
A) $1,200.
B) $2,400.
C) $3,000.
D) $4,000.
E) none of the above

Question

Refer to the following:
The price of capital is $12 per unit.
 
-If the price of labor is $30 per unit, the lowest possible cost of producing 200 units of output is
A) $1,200. 
B) $2,400. 
C) $3,000. 
D) $4,000. 
E) none of the above

Quizplus · Accepted Answer

The lowest possible cost of producing 200 units of output is $30 per unit x 200 units = $6,000. However, the question asks for the lowest possible cost, which means that we can assume that the producer is operating at the most efficient level of production. At this level of production, the producer will be using the least amount of inputs (labor and capital) to produce the given output. Therefore, the lowest possible cost of producing 200 units of output is $30 per unit x 200 units = $6,000.

Refer to the Following