Posted by Kingram on .
Suppose that a firm is currently employing 30 workers, the only variable input, at a wage rate of $60. The average product of labor is 30, the last worker added 12 units to total output, and total fixed cost is: $3,600.
a. What is marginal cost?
b. What is average variable cost?
c. How much output is being produced?
d. What is average total cost?
e. Is average variable cost increasing, decreasing or constant? What about average total cost>
Take a shot, what do you think.
Hint, MC is the cost of producing the last unit. Here, the last 12 cost $60, so MC = 60/12 = $5