The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. $$\begin{array} { c c }
\text { Output } & \begin{array} { c }
\text { Average } \
\text { Variable Cost }
\end{array} \
\hline 10 & \$ 40 \
20 & 30 \
30 & 45 \
40 & 60
\end{array}$$ Given the above,if the firm produces 40 units of output,what is total variable cost?
A)$1.50
B)$60
C)$100
D)$2,400
E)none of the above

Question

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. $$\begin{array} { c c } 
\text { Output } & \begin{array} { c } 
\text { Average } \
\text { Variable Cost }
\end{array} \
\hline 10 & \$ 40 \
20 & 30 \
30 & 45 \
40 & 60
\end{array}$$ Given the above,if the firm produces 40 units of output,what is total variable cost?
A)$1.50
B)$60
C)$100
D)$2,400
E)none of the above

Quizplus · Accepted Answer

The average variable cost for producing 40 units is $60. Therefore, the total variable cost is 40 units * $60 = $2,400.

The Capital Stock Is Fixed at 50 Units,the Price of Capital