Use the table to answer the question.
Number of Workers Output Total Cost Variable Cost Fixed Cost
5 100 $130 $80 $50
10 180 $210 $160 $50
15 240 $290 $240 $50
20 280 $370 $320 $50
If the cost of labor is the only variable cost that the firm faces, what is the cost incurred by the business for each additional unit of labor?
To determine the cost incurred by the business for each additional unit of labor, we need to calculate the change in total cost with each additional unit of labor.
Number of Workers: 5 10 15 20
Total Cost: $130 $210 $290 $370
Change in Total Cost: $80 $80 $80
We can see from the table that the change in total cost remains constant with each additional unit of labor. It is $80.
Therefore, the cost incurred by the business for each additional unit of labor is $80.