A firm currently produces 3,500 units of output per week. After an additional worker is hired, output rises to 3,750 units per week. If the weekly wage paid to a worker is $500, what is the firm's short-run marginal cost?
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Answer:
$2
Explanation:
the additional worker the output rises to 3,750, the first thing is to find the number of additional units that were produced: 3,750-3500= 250 With the new worker, the firm produces an additional 250 units that cost $500 because this is the salary of the new worker and to calculate the cost of one additional unit you have to do the following:
250 units ⇒ $500
1 unit
⇒ x=( 1*500)/250= 2
The firm's short-run marginal cost is $2.
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