Asked by
Fahim Asfak
on Nov 04, 2024
Verified
Refer to Table 8.4. Assuming the price of capital (K) is $10 per unit and the price of labor (L) is $5 per unit, the lowest long-run total cost of producing one unit of output is
A) $8.
B) $50.
C) $60.
D) $110.
Long-Run Total Cost
The aggregate cost of production when all factors of production are variable and the scale of operation can change.
Units of Variable K
In economics, this refers to units of a variable factor of production (K often denotes capital), where the quantity can be changed in the short run to increase or decrease production.
Units of Output
The quantity of goods or services produced by an entity in a given period of time.
- Identify the consequences of production approach selection on efficiency and cost implications.
- Distinguish between the short-run and long-run cost structures and their implications for production.
Verified Answer
MD
Learning Objectives
- Identify the consequences of production approach selection on efficiency and cost implications.
- Distinguish between the short-run and long-run cost structures and their implications for production.