11. Consider the following table illustrating the production function of gadgets. Furthermore, suppose the firm has fixed costs of $2,000/day and the wage rate is $250/day.What is the firm's total cost of producing 2,600 gadgets?a$2,000b$2,500c$3,500dnone of the above AVC ($)(VarialbeTC ($) (Fixed AFC ($)(FixedCost+Varialb Cost/Quantit Cost/Quantit cost/quantite Cost)ATC ($) (totalQMPL(workers)(Units)(Units)FC ($)VC ($)v)v)MC ($)200014004002000290050020002.22150060020001.334195045020001.035.230035020000.87260030020000.777285025020000.70

Total cost can be calculated by using the following formula.

Consider the following table illustrating the production function of gadgets. Furthermore, suppose the firm has fixed costs of $2,000/day and the wage rate is $250/day. What is the firm's total cost of producing 2,600 gadgets? a $2,000 b $2,500 c $3,500 d none of the above

Consider the following table illustrating the production function of gadgets. Furthermore, suppose the firm has fixed costs of $2,000/day and the wage rate is $250/day. What is the firm's total cost of producing 2,600 gadgets? a $2,000 b $2,500 c $3,500 d none of the above

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

11. Consider the following table illustrating the production function of gadgets. Furthermore, suppose the firm has fixed costs of $2,000/day and the wage rate is $250/day.

What is the firm's total cost of producing 2,600 gadgets?

a	$2,000
b	$2,500
c	$3,500
d	none of the above

AVC ($)
(Varialbe
TC ($) (Fixed AFC ($)(Fixed
Cost+Varialb Cost/Quantit Cost/Quantit cost/quantit
e Cost)
ATC ($) (total
Q
MPL
(workers)
(Units)
(Units)
FC ($)
VC ($)
v)
v)
MC ($)
2000
1
400
400
2000
2
900
500
2000
2.22
1500
600
2000
1.33
4
1950
450
2000
1.03
5.
2300
350
2000
0.87
2600
300
2000
0.77
7
2850
250
2000
0.70

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