Question: Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when the firm hires 2 workers, the total cost of production is $100. When the firm hires 3 workers, the total cost of production is $120. In addition, assume that the variable cost per unit of labor is the same regardless of the number of units of labor that are hired. What is the firm's fixed cost?

Please also provide the working out and necessary formulas.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

suppose that for a particular friend, the only variable input into the production process is labor and that Ill put equals zero when no workers are hired. In addition suppose that when the firm hires...

The owner of a small retail store does her own accounting work. How would you measure the opportunity cost of her work? Please explain whether the following statements are true or false. If the owner...

Question Labour is a variable input into the production process. In this sense, a change in the amount of labour used in production (the number of employee hours) lead to a proportionate change in...

1. Suppose that labor is the only variable input in the production process for a com- petitive profit-maximizing firm that produces coffee mugs. The firm's production function is shown below. Labor...

Rent controls create distortions in the housing market by: a. Increasing rents received by landlords. b. Raising property values. c. Encouraging landlords to overspend for maintenance. d....

A profitmaximizing firm in the short nm will expand output: (1 Point} until marginal cost begins to rise. until total revenue equaEs total cost. until marginal cost equals average variable cost. as...

1- Which of the following increases might shift an individual's supply curve of labour to the left? O a. an increase in fringe benefits O b. an increase in nonwage income O c. an increase in the wage...

1. A firm pays its accountant an annual retainer of $10,000. Is this an economic cost? 2. Suppose that labor is the only variable input to the production process. If the marginal cost of production...

... Multiple choice questions. Answers and explanations needed. Answer all questions up to number 55 UNITS OF MANUFACTURED GOODS AND 33. If a severe drought destroys a significant portion SERVICE...

Write a detailed paper on Quality management systems

A loan of $8,900 at 7.75% annually is made on September 10 and due on December 10. Find (a) The exact interest (b) The ordinary interest. Round answers to the nearest cent.

I would like you to formulate a letter to the GASB that explains why financial information presented in the annual report needs to have a context, which would allow users to evaluate a government's...

Answer the following items on a separate sheet of paper. Show your computations as necessary. (12 items x 5 points) Case 1 Japs Company's Audio Division produces a speaker that is used by...

What does this look like?

1. The purpose of this chapter is to describe the key principles, procedures and strategies of personal communication benchmarking, as understood in this context.

1. Set a personal goal for yourself in your work situation. Examine this goal in the light of the 10 factors to achieve goals.