The book's answer is 4 units of labor but please explain solution Try It!1. Suppose Acme Clothing is operating with 20 units ofcapital and producing 9 units of output at an averagetotal cost of $67, as shown in Figure 6.8. How muchlabor is it using?Quantity/dayTotal costAFCAVCATCMCAFC, AVC, ATC, and MC$200$2001501001 2 3 4 5 6 7 8$300 $363 $400 $433$458$200 $100 $67 $50 $40$100 $82 567 $58 $52$480 $500$33 $29$47 $43$300 $182 $133 $108 $92 $80 $71 567 567 $70$100 $63 $37 $33 $25 $22 $20 $38 $62 $100 $200502 3AVCATC10 11$900$538 $600 $700$25 $22 $20$424 5 6 7 8Jackets per day$18$64$82MCAFC9 10 11

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Answered: 1. Suppose Acme Clothing is operating…

1. Suppose Acme Clothing is operating with 20 units of capital and producing 9 units of output at an average total cost of $67, as shown in Figure 6.8. How much labor is it using?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The book's answer is 4 units of labor but please explain solution

Try It!
1. Suppose Acme Clothing is operating with 20 units of
capital and producing 9 units of output at an average
total cost of $67, as shown in Figure 6.8. How much
labor is it using?
Quantity/day
Total cost
AFC
AVC
ATC
MC
AFC, AVC, ATC, and MC
$200
$200
150
100
1 2 3 4 5 6 7 8
$300 $363 $400 $433
$458
$200 $100 $67 $50 $40
$100 $82 567 $58 $52
$480 $500
$33 $29
$47 $43
$300 $182 $133 $108 $92 $80 $71 567 567 $70
$100 $63 $37 $33 $25 $22 $20 $38 $62 $100 $200
50
2 3
AVC
ATC
10 11
$900
$538 $600 $700
$25 $22 $20
$42
4 5 6 7 8
Jackets per day
$18
$64
$82
MC
AFC
9 10 11

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