A new metal alloy is discovered that uses copper and zinc in fixed proportions where each unit of the alloy requires 4 units of zinc and 2 units of copper.If no other inputs are required, if the price of zinc is $2 per unit, and the price of copper is $5 per unit and if total output is 4,000 units, what is the average cost per unit of output?
A)$.50
B)$2
C)$18
D)$20
E)$25

Question

Quizplus · Accepted Answer

To produce one unit of the alloy, 4 units of zinc and 2 units of copper are required.
Therefore, total cost of inputs per unit of output = (4 units of zinc x $2 per unit) + (2 units of copper x $5 per unit) = $8 + $10 = $18
Since the total output is 4,000 units, the total cost of inputs will be 4,000 x $18 = $72,000
Average cost per unit of output = total cost of inputs / total output = $72,000 / 4,000 units = $18 per unit.

A New Metal Alloy Is Discovered That Uses Copper and Zinc