Respuesta :
Answer:
$0.808
Explanation:
Given:
Number of workers hired = 6
Number of units to be produced = 90
Fixed cost of the product = $6 per unit
Variable cost = $10 per unit
Marginal product of the 7th unit of labor = 4
Now,
Total variable cost = Variable cost per unit labor × Total labor hired
or
The total variable cost = $10 × 7 = $70
Thus,
The total cost = Fixed cost + Total variable cost
or
The total cost = $6 + $70 = $76
Now,
the total units produced
= Unit produced by 6 labor + marginal product from seventh labor
or
The total units produced = 90 + 4 = 94
Hence,
the average variable cost of production when the firm hires 7 workers
= [tex]\frac{\textup{Total cost of production}}{\textup{Total units produced}}[/tex]
or
= [tex]\frac{76}{94}[/tex]
= $0.808
Answer:
The average variable cost of production when the firm hires 7 workers is 81.77 cents
Explanation:
For 6 workers,
The fixed cost is = $6
And, the variable cost is = Variable cost per unit × number of workers
= $10 × 6
= $60
For 7 workers,
The fixed cost is = $6
And, the variable cost is = Variable cost per unit × number of workers
= $10 × 7
= $70
The average variable cost equals to
= (Variable cost ÷ number of units) + marginal product of the seventh unit of labor
= $70 ÷ 90 units + 4
= 77.77 + 4
= 81.77 cents
