Use the following graph to answer the questions.

a. If the wage rate and the rental price of ovens are both $100 and  total cost is $2,000, is the cost-minimizing point A, B, or C? Briefly explain.

b. If the wage rate is $25, the rental price of ovens is $100, and total cost is $1,000, is the cost-minimizing point A, B, or C? Briefly explain.

c. If the wage rate and the rental price of ovens are both $100 and total cost is $4,000, is the cost-minimizing point A, B, or C? Briefly explain.

Transcribed Image Text:

Capital (ovens per week) 40 20 10 0 A B C 20 Q = 12,000 Q = 5,000 40 Labor (workers per week)