Suppose that a company currently employs 2 comma 500 workers and produces 4 million units of output per month. Labor is its only variable input, and the company pays each worker the same monthly wage. The company's current total variable costs equal $5 million. 1.What are average variable costs at this firm's current output level? $ nothing. (Your answer should have two decimal place.) 2.What is the average product of labor? nothing. (Your answer should be rounded to two decimal places.) 3.What monthly wage does the firm pay each worker? $ nothing. (Your answer should be roudned to the nearest penny.)

Question

contestada

Respuesta :

Chrisnando Chrisnando · Answer 1 · 2020-04-20T08:37:46+02:00

Answer:

1) 1.25

2) 1600.00

3) 250,000 pennies

Explanation:

Given:

•Number of workers, n = 2,500

•Output per month =4,000,000 units

•Current total variable costs = $5,000,000

1) For average variable costs:

Average variable costs =

Total variable costs/output.p.month

=[tex] \frac{$5,000,000}{4,000,000}[/tex]

= 1.25

2) Average product of labour will be:

Average product of labour =

Output per month/n

[tex]= \frac{4,000,000}{2,500}[/tex]

= 1,600.00

3) Monthly wage for each worker will be given as:

Monhly wage =

Total variable costs/n

Therefore, monthly wage for each worker =

[tex] = \frac{5,000,000}{2,500} [/tex]

= $2,500 => 250,000 pennies