Question

In: Economics

From this data, what is the average total cost when two workers are hired?

Suppose you are given the following data:

Assume the following figures (all labor is paid equally):

                                    Quantity =       34 units produced for 3 workers hired

10 units produced for 2 workers hired

1 unit produced for 1 worker hired

0 units produced for 0 workers hired

                                    Fixed Cost = $50

                                    Variable Cost = $40 total for 1 worker hired

                                   

            From this data, what is the average total cost when two workers are hired?

Solutions

Expert Solution

Average total cost =total cost/quantity

total cost =variable cost +fixed cost

variable cost=L*wage

=2*40

=$80

Fixed cost =$50

Total cost =80+50=$130

Q=10

Average total cost =130/10=$13

the average total cost when two workers are hired is $13


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