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,how much does the 23rd unit of output add to the firm's total cost?
A)$75
B)$135
C)$750
D)$1,350
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,how much does the 23rd unit of output add to the firm's total cost?
A)$75
B)$135
C)$750
D)$1,350
E)none of the above

Quizplus · Accepted Answer

The 23rd unit of output adds $30 to the firm's total variable cost and $30 to the firm's total fixed cost, for a total of $60.

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