Suppose the short-run production function is q = 10 ∗ L.If the wage rate is $10 per unit of labor,then MC equals
A) q.
B) q/10.
C) 10/q.
D) 1.

Question

Quizplus · Accepted Answer

The marginal cost (MC) is the change in total cost from producing one more unit of output. Since the production function is q = 10 * L, the marginal product of labor is constant at 10. With a wage rate of $10, the MC is the wage rate divided by the marginal product, which is 10/10 = 1.

Suppose the Short-Run Production Function Is Q = 10 ∗