Because the amount of labour a firm employs can be changed, the cost of labour is known as
A) minimum cost.
B) an unavoidable cost.
C) fixed cost.
D) variable cost.
E) maximum cost.

Question

Quizplus · Accepted Answer

The cost of labour is a variable cost because it varies with the amount of labour a firm employs. As the firm hires more workers, the cost of labour increases, and as it lays off workers, the cost decreases. Therefore, the best choice is D, variable cost.

Because the Amount of Labour a Firm Employs Can Be