Upon opening a printing and copy shop, a firm budgets $30,000 for copy machines and labor. The firm can operate its copy machine for 2,000 hours if it buys no labor. What is the vertical intercept of the isocost line when labor is measured on the horizontal axis?
A) 15 hours of labor
B) 500 hours of labor
C) 15 hours of copy machine operation
D) 2,000 hours of copy machine operation
E) $960,000

Question

Quizplus · Accepted Answer

The vertical intercept of the isocost line represents the maximum amount of copy machine operation hours the firm can afford if it spends all its budget on the copy machine and none on labor, which is 2,000 hours.

Upon Opening a Printing and Copy Shop, a Firm Budgets