Cost of Production

The following questions refer to the diagram below. The wage rate is assumed to be $12 per hour, the rental rate is assumed to be $6 per hour, and capital is assumed to be fixed in the short run at 10 hours.

-Refer to Cost of Production.In order to produce 50 units of output per week,the firm must spend at least
A) $60.
B) $120.
C) $180
D) an amount that can not be determined given the available information.

Question

Cost of Production

The following questions refer to the diagram below. The wage rate is assumed to be $12 per hour, the rental rate is assumed to be $6 per hour, and capital is assumed to be fixed in the short run at 10 hours.

-Refer to Cost of Production.In order to produce 50 units of output per week,the firm must spend at least
A) $60. 
B) $120. 
C) $180 
D) an amount that can not be determined given the available information.

Quizplus · Accepted Answer

The cost of production cannot be determined with the information given, as we do not know the cost per unit of output or the total fixed costs. However, we can calculate the minimum total cost of producing 50 units per week by using the formula: total cost = (total fixed cost/number of units produced per week) + variable cost per unit. Assuming there are no fixed costs, we can calculate the variable cost per unit by dividing the total cost of producing 50 units by 50. If we assume the minimum variable cost per unit is $3, then the minimum total cost to produce 50 units per week would be 50 x $3 = $150. Therefore, choice C is the best answer.

Cost of Production The Following Questions Refer to the Diagram Below. the Wage