-Assume labor-the only variable input of a firm-has average and marginal product curves shown in the figure above.The price of labor is $1,000 per unit .At minimum average variable cost,the firm employs __________ units of labor and minimum average variable cost is reached at __________ units of output.
A)300; 810,000
B)300; 962,500
C)450; 962,500
D)500; 540,000
E)none of the above

Question

-Assume labor-the only variable input of a firm-has average and marginal product curves shown in the figure above.The price of labor is $1,000 per unit .At minimum average variable cost,the firm employs __________ units of labor and minimum average variable cost is reached at __________ units of output.
A)300; 810,000 
B)300; 962,500 
C)450; 962,500 
D)500; 540,000 
E)none of the above

Quizplus · Accepted Answer

The correct answer cannot be determined without the accompanying figure showing the average and marginal product curves. The relationship between units of labor, output, and costs requires specific data from the graph to accurately determine the points of minimum average variable cost and the corresponding units of labor and output.

-Assume Labor-The Only Variable Input of a Firm-Has Average and Marginal