Use the following to answer question:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 43 statues is:
A)$10.
B)$20.
C)$40.
D)$43.

Question

Use the following to answer question: 
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 43 statues is:
A)$10. 
B)$20. 
C)$40. 
D)$43.

Quizplus · Accepted Answer

To produce 43 statues, you have to hire two workers, which will cost $20 ($10 per worker per day). Adding the $10 loan payment, the total cost will be $30. Therefore, the variable cost of producing 43 statues is $30 - the cost of producing 1 statue, which is $30/43. This gives us approximately $0.70 per statue. Multiplying by 43, we get a variable cost of approximately $30 - $0.70*43 = $9.90, which rounds up to $10. Therefore, the best choice is C: $40.

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