Why would labor be treated as a variable cost? labor costs will decrease as the firm produces more quantity. firms must decide how much labor to employ before production begins. labor costs are an input cost that firms are unable to change in the short run producing larger quantities of a good or service generally requires more worker

Why would labor be treated as a variable cost? labor costs will decrease as the firm produces more quantity. firms must decide how much labor to employ before production begins. labor costs are an input cost that firms are unable to change in the short run producing larger quantities of a good or service generally requires more worker

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 1PA

See similar textbooks

Similar questions

Diminishing returns occurs in the short run because The average product of labor will decrease after some amount of labor is hired in the short run b. There are fixed inputs to production in the short run The marginal product of labor will decrease after some amount of labor is hired in the short run There are variable inputs to production in the short run
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. When the firm uses 120 units of labor, what is its marginal cost at this output?
A firm minimizes its costs by using inputs such that the marginal product of labor is 10 and the marginal product of capital is 20. The price of capital is $10 per unit. What must the price of labor be? (hint: the marginal product per dollar should be equal for both inputs)
When the marginal product of labor is increasing marginal cost is decreasing constant increasing at its maximum
Suppose Marcus produces chocolate with two inputs: factory and labour. The rent of the factory is $3,000 per week, and the wage of each worker is $2,000 per week. When Marcus produces 200 pounds of chocolate every week, he employs 2 workers. Calculate the fixed cost (FC), variable cost (VC), total cost (TC), average fixed cost (AFC), average variable cost (AVC), and average total cost (ATC) of producing 200 pounds of chocolate. The total cost of producing 201 pounds of chocolate is $7030. Calculate the marginal cost (MC) of producing the 201st pound of chocolate.