The table provides output levels as Paper Products R Us hires more workers. Their capital is currently fixed at 4 units and eac costs $100. Each worker costs $50.
-Refer to the table above. What is the average total cost of producing 85 units of output?

Question

Quizplus · Accepted Answer

To find the average total cost of producing 85 units of output, we need to find the total cost and divide by the total output. From the table, we see that to produce 85 units of output, the company needs to hire 8 workers. At 8 workers, the total cost is $610 (4 units of capital * $100 per unit + 8 workers * $50 per worker = $400 + $250 = $650).

Thus, the average total cost is $610/85 units = $7.65. Therefore, the correct choice is C.

The Table Provides Output Levels as Paper Products R Us