-Sandra's Shirts' production function is shown in the above table. Sandra rents three knitting machines for $30 a day each and hires workers at a daily wage rate of $40 per worker. If Sandra produces 18 shirts per day, what is her average total cost?
A) $10.00
B) $5.00
C) $9.44
D) $6.67

Question

-Sandra's Shirts' production function is shown in the above table. Sandra rents three knitting machines for $30 a day each and hires workers at a daily wage rate of $40 per worker. If Sandra produces 18 shirts per day, what is her average total cost?
A) $10.00 
B) $5.00 
C) $9.44 
D) $6.67

Quizplus · Accepted Answer

To find the average total cost (ATC) for producing 18 shirts per day, we need to know the total cost (TC) and the total output (Q). The total cost includes the cost of renting knitting machines and the cost of hiring workers. Without the specific number of machines and workers used to produce 18 shirts, we assume the given costs ($30 per machine per day for three machines and $40 per worker) are the relevant costs to produce this quantity. Thus, TC = (3 machines * $30) + (workers' cost). However, without the exact number of workers or the total cost directly provided, we cannot accurately calculate the ATC using the information given. The correct calculation of ATC would typically involve dividing the total cost by the total output (ATC = TC/Q). Since the question lacks specific details on total costs or the number of workers, the answer provided (C) $9.44, suggests there's assumed information not displayed in the question. This answer would be correct if the total costs were known and equaled $170 (for example), with 18 shirts produced, ATC = $170 / 18 = $9.44. However, this specific calculation is based on information not provided in the question, indicating a need for assumptions or additional data.

-Sandra's Shirts' Production Function Is Shown in the Above Table