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Suppose That the Firm's Only Variable Input Is Labor

Question 7

Multiple Choice

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.What is average variable cost?


A) $0.63
B) $1.60
C) $3.20
D) $10.00
E) none of the above

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