Suppose that a company currently employs 1 comma 000
workers and produces 4
million units of output per month. Labor is its only variable input, and the company pays each worker the same monthly wage. The company's current total variable costs equal $2
million.
What is the average product of labor?
million.
To find the average product of labor, we need to divide the total output by the total number of workers.
Average Product of Labor = Total Output / Total Workers
Total Output = 4 million units
Total Workers = 1,000
Average Product of Labor = 4 million / 1,000 = 4,000 units
Therefore, the average product of labor is 4,000 units.
To find the average product of labor, you need to divide the total output by the total variable input (labor).
First, calculate the total output per worker by dividing the total output (4 million units) by the total number of workers (1,000):
Total output per worker = Total output / Total number of workers
Total output per worker = 4,000,000 / 1,000 = 4,000 units
Next, divide the total output per worker by the total variable input (labor) cost (2 million dollars) to find the average product of labor:
Average product of labor = Total output per worker / Total variable input (labor) cost
Average product of labor = 4,000 units / 2,000,000 dollars
Hence, the average product of labor is 0.002 units per dollar.
To calculate the average product of labor, you need to divide the total output by the number of workers. Here's how you can calculate it step by step:
1. Identify the given information:
- Total number of workers (L): 1,000
- Total output per month (Q): 4 million units
- Total variable costs (TVC): $2 million
2. Calculate the average product of labor (APL):
APL = Q / L
Substituting the given values, we have:
APL = 4 million units / 1,000 workers
APL = 4,000 units per worker
Therefore, the average product of labor is 4,000 units per worker.