Question: What is total fixed cost?
A. 10
B. 15
C. 20
D. Cannot be determined
E. None of the above

2. What is total cost when Q = 1?
A. 30
B. 35
C. 40
D. 20
E. None of the above

3. What is average total cost when Q = 2?
A. 10
B. 20
C. 30
D. 40
E. None of the above

4. What is marginal cost when Q = 3?
A. 5
B. 10
C. 15
D. 20

5. What is marginal cost when Q = 4?
A. 5
B. 10
C. 11
D. 15
E. 26

The production engineers at Impact Industries have derived the optimal combinations of labor and capital (the only two inputs used by Impact) for three levels of output: 120, 180, and 240 units of output:

Q is the output level, L* is the optimal amount of labor to use, and K* is the optimal amount of capital to use. The price of labor is $100 per unit and the price of capital is $20 per unit.

6. If the manager of Impact Industries decides to produce 120 units, what will the long-run total cost and long-run average cost of producing 120 units?

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document