Question

# The cookie company in the mall hires only labor to produce cookies. The workers are paid...

The cookie company in the mall hires only labor to produce cookies. The workers are paid \$70 per day, and the cost of renting the space in the mall is \$300 per day.

 Number of workers Daily output (cookies) 1 200 2 400 3 600 4 700

The daily fixed costs of production are

Choose one:A.   \$300 .B.   \$370 .C.   \$140 .D.   \$70 .E.   \$0.

The labor cost per day of hiring two workers is   \$  .

The total cost per day when three workers are hired is   \$  .

The marginal product per day of the fourth worker is     cookies.

Fixed cost of production = \$300

Cost of per labour =\$70

1) Daily fixed cost of production is cost of rent so fixed cost of production =\$300

2) Labour cost of hiring two worker per day (2×\$70) =\$ 140

3) total cost of hiring three worker per day labour cost(3×\$70) =\$ 210

Fixed cost =\$300

Total cost =\$210+ \$300 = \$510

4) Marginal productivity at 4th labour

= TP at 4 worker - TP at 3 worker

= 700-600

= 100

Marginal productivity at 4th worker =\$100

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