In order to produce the desired quantity, the firm needs to hire 50 employees and rent 10 units of capital. If the wage rate is $100 per employee and the rental rate is $200 per unit, what is the total cost of producing the desired quantity?
A) $3,000
B) $5,000
C) $7,000
D) $9,000

Question

Quizplus · Accepted Answer

The total cost of producing the desired quantity is calculated by adding the total cost of hiring employees and the total cost of renting capital units. For employees: 50 employees * $100/employee = $5,000. For capital: 10 units * $200/unit = $2,000. Therefore, the total cost = $5,000 + $2,000 = $7,000.

In Order to Produce the Desired Quantity, the Firm Needs