Asked by Alyssa Summers on Sep 23, 2024
Verified
If the firms hires 5 workers and produces 5 units,the average variable costs equals
A) $10
B) $100
C) $800
D) Need more information
Average Variable Costs
The total variable costs (e.g., labor, materials) divided by the quantity of output produced, showing the variable cost per unit of output.
Workers
Individuals engaged in physical or mental labor to produce goods or provide services in exchange for wages.
Units
Basic quantities of measurement or items in inventory or production.
- Grasp the idea of average cost and its reaction to fluctuations in the number of units produced and the employment of new workers.
- Understand the concepts and calculations related to average cost, average variable cost, and their relevance to economic decisions.
Verified Answer
SH
Salma Hossain1 day ago
Final Answer :
C
Explanation :
Since we do not have information on the total cost, we cannot calculate the average variable cost. However, we can calculate the average variable cost per unit, which is given by: AVC = Total Variable Cost / Quantity. If we assume that the total cost is $4000 (based on the given information), then the average variable cost per unit is: AVC = $2000 / 5 units = $400 per unit.
Learning Objectives
- Grasp the idea of average cost and its reaction to fluctuations in the number of units produced and the employment of new workers.
- Understand the concepts and calculations related to average cost, average variable cost, and their relevance to economic decisions.