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f the wage rate is $20 per unit and if the firm uses two units of capital in the short run with rental rate of $200 per unit then what is the average total cost for the 30th unit of production created

Sagot :

anthougo

Answer:

The average total cost for the 30th unit of production created is:

= $420.

Explanation:

a) Data and Calculations:

Wage rate per unit = $20

Capital rental rate per unit of capital = $200

Units of capital per unit = 2

Capital rental rate per unit of product = $400 ($200 * 2)

Total cost for each unit of production = $420 ($400 + $20)

b) More capital is consumed by the production of this product.  The production is capital-intensive while labor is very cheap.  To product a unit, the company will incur $20 in labor and $400 in capital.  The total unit cost is $420 (cost of labor and capital per unit)

ayokenny2001

The average total cost for the 30th unit of production created is $420

What is average total cost?

Average Total Cost refers to the combination of all fixed and variable costs per unit in producing a product.

Given the above information, the

Total cost for each unit of production

= $420 ($400 + $20)

The above means that more capital is consumed by the production of this product. Also, the production is capital-intensive while labor is very cheap.  

To produce a unit, the company will incur $20 in labor and $400 in capital.  The total unit cost is $420 (cost of labor and capital per unit)

Hence, the average total cost for the 30th unit of production created is $420

Learn more about average total cost here : https://brainly.com/question/25109150

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