-Sandra's Sweaters' production function is shown in the above table. Sandra rents three knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Sandra produces 18 sweaters per day, what is her average total cost?
A) $5.00
B) $6.67
C) $9.44
D) $10.00

Question

-Sandra's Sweaters' production function is shown in the above table. Sandra rents three knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Sandra produces 18 sweaters per day, what is her average total cost?
A) $5.00 
B) $6.67 
C) $9.44 
D) $10.00

Quizplus · Accepted Answer

To find the average total cost, calculate the total cost (fixed costs + variable costs) and divide by the quantity produced. Fixed costs are $90 (3 machines x $30), and variable costs depend on the number of workers needed to produce 18 sweaters. Assuming the table provides this information, calculate the total cost and divide by 18 to find the average total cost.

-Sandra's Sweaters' Production Function Is Shown in the Above Table