Question

Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers the firm produces 90 units of output. Fixed costs of production are $6 and the variable cost per unit of labor is $10. The marginal product of the seventh unit of labor is 4. Given this information, what is the average variable cost of production when the firm hires 7 workers?

a; $12.67
b; $11
c; 81 cents
d; 75 cents

Answer 1

a

Step-by-step explanation:

variable cost per unit of labour $12.67