In the following graph, the price of capital is $100 per unit; the price of labor is $25 per unit. How much does the seventh unit of output add to total cost? Units of capital 100 64 40 24 64 nothing $400 $800 $4,000 $8,000 144 120 160 Q-10 Q-20 280 Units of labor Q-30 400

In the following graph, the price of capital is $100 per unit; the price of labor is $25 per unit. How much does the seventh unit of output add to total cost? Units of capital 100 64 40 24 64 nothing $400 $800 $4,000 $8,000 144 120 160 Q-10 Q-20 280 Units of labor Q-30 400

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

In the following graph, the price of capital is $100 per unit; the price of labor is $25 per unit. How much
does the seventh unit of output add to total cost?
Units of capital
100
64
40
24
64
nothing
$400
$800
$4,000
$8,000
C
144
120 160
Q-10
Q-20
280
Units of labor
Q-30
400

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