Exhibit 11-10 Labor and wage rate data

In Exhibit 11-10, the marginal factor cost of the 8th employee is:

Question

Exhibit 11-10 Labor and wage rate data

In Exhibit 11-10, the marginal factor cost of the 8th employee is:

Quizplus · Accepted Answer

Marginal Factor Cost (MFC) is the additional cost incurred by the firm when it hires an additional unit of factor input. To calculate MFC, we need to look at the change in total cost resulting from hiring the 8th employee. From the table, we can see that the total cost of hiring 7 employees is $100, and the total cost of hiring 8 employees is $121. Therefore, the change in total cost is $121 - $100 = $21. Hence, the MFC of the 8th employee is $21.

Exhibit 11-10 Labor and Wage Rate Data