Multiple Choice
Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers the firm produces 90 units of output. Fixed costs of production are $6 and the variable cost per unit of labor is $10. The marginal product of the seventh unit of labor is 4. Given this information, what is the average total cost of production when the firm hires 7 workers?
A) $10.06
B) $9.64
C) 81 cents
D) 70 cents
Correct Answer:
Verified
Correct Answer:
Verified
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