Table 13-9

$$\begin{array} { | c | c | c | c | }
\hline \begin{array} { c }
\text { Labor } \
\text { (Number of w orkers) }
\end{array} & \begin{array} { c }
\text { Output } \
\text { (Units) }
\end{array} & \begin{array} { c }
\text { Fixed Cost } \
\text { (Dollars) }
\end{array} & \begin{array} { c }
\text { Variable Cost } \
\text { (Dollars) }
\end{array} \
\hline 0 & 0 & 30 & 0 \
\hline 1 & 100 & 30 & 15 \
\hline 2 & 180 & 30 & 30 \
\hline 3 & 240 & 30 & 45 \
\hline 4 & 280 & 30 & 60 \
\hline 5 & 300 & 30 & 75 \
\hline
\end{array}$$
-Refer to Table 13-9. For the firm whose production function and costs are specified in the table, its average-variable-cost curve is
A)constant.
B)decreasing.
C)increasing.
D)U-shaped.

Question

Table 13-9
​
​
 $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Labor } \
\text { (Number of w orkers) }
\end{array} & \begin{array} { c } 
\text { Output } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Fixed Cost } \
\text { (Dollars) }
\end{array} & \begin{array} { c } 
\text { Variable Cost } \
\text { (Dollars) }
\end{array} \
\hline 0 & 0 & 30 & 0 \
\hline 1 & 100 & 30 & 15 \
\hline 2 & 180 & 30 & 30 \
\hline 3 & 240 & 30 & 45 \
\hline 4 & 280 & 30 & 60 \
\hline 5 & 300 & 30 & 75 \
\hline
\end{array}$$
-Refer to Table 13-9. For the firm whose production function and costs are specified in the table, its average-variable-cost curve is
A)constant.
B)decreasing.
C)increasing.
D)U-shaped.

Quizplus · Accepted Answer

The average variable cost (AVC) is calculated by dividing the variable cost by the output. As the number of workers increases from 1 to 5, the variable cost increases, but the rate of increase in output decreases. This leads to an increasing AVC, as each additional unit of output costs more in variable costs than the previous one.

Table 13-9 ​ ​ -Refer to Table 13-9

Table 13-9

-Refer to Table 13-9