Question

9:37 PM Question 21 10 pts To start up a small part time business assume your only costs are paying $1,000 to rent a small factory and paying each employee you hire $100. Based on the previous information complete the following table and answer the questions that follow 0 0 10 25 3 35 40 a. If you decide to hire 3 employees what will TFC be equal to? I Select ] b. If you decide to hire 4 employees what will TVC be equal to? I Select ] c. If you decide not to hire any employees what will TC be equal to? I Select] d. If you decide to hire 4 employees what will MC be equal to? I Select] e. If you decide to hire 3 emplovees what will AFC be equal to?

Answer 1

a. Total fixed costs are the same whatever the employment level. Thus here the TFC will be $1000.

b. For 4 employees the total variable costs is $400.

c. Total cost is the sum of total fixed costs and total variable costs. Thus for no employees being hired the TC=TFC. which is $1000.

d. The marginal cost of the 4th employee is $100.