Refer to the following:
Following is a firm's expansion path. The price of capital is $5 per unit; the price of labor is $2 per unit.

$\begin{array}{ccc}
&\text { Optimal Imput Choice }\
\text { Units of Output } & \text { Units of Capital }&\text { Units of Labor } \
10 & 6 &5 \
20 & 8 & 10 \
30 & 13 & 20 \
\end{array}$
-When output is 30 units, what is long-run total cost?
A) $60
B) $105
C) $150
D) $260
E) none of the above

Question

Refer to the following:
Following is a firm's expansion path. The price of capital is $5 per unit; the price of labor is $2 per unit.

$\begin{array}{ccc}
&\text { Optimal Imput Choice }\
\text { Units of Output } & \text { Units of Capital }&\text { Units of Labor } \
10 & 6 &5 \
20 & 8 & 10 \
30 & 13 & 20 \
\end{array}$
-When output is 30 units, what is long-run total cost?
A) $60
B) $105
C) $150
D) $260
E) none of the above

Quizplus · Accepted Answer

The total cost is the sum of the cost of capital and the cost of labor. The cost of capital is $5 per unit, and the cost of labor is $2 per unit. When output is 30 units, the firm uses 13 units of capital and 20 units of labor. Therefore, the total cost is $5 * 13 + $2 * 20 = $105.

Refer to the Following: Following Is a Firm's Expansion Path

Refer to the Following:
Following Is a Firm's Expansion Path