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Suppose That When 2 Units of Labor,the Only Variable Input

Question 78

Multiple Choice

Suppose that when 2 units of labor,the only variable input into the production process,are hired,the total cost of production is $100 and that when 3 units of labor are hired the total cost of production is $120.In addition,assume that the variable cost per unit of labor is the same regardless of the number of units of labor that are hired.What is the firm's fixed cost?


A) $40
B) $60
C) $80
D) $100

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