Number of Workers Output Total Cost Variable Cost Fixed Cost

Question

5 100 $130 $80 $50
10 180 $210 $160 $50
15 240 $290 $240 $50
20 280 $370 $320 $50
If the cost of labor is the only variable cost that the firm faces, what is the cost incurred by the business for each additional unit of labor?

(1 point)
Responses

$50
50 dollars

$10
10 dollars

$80
80 dollars

$16

Answer 1

To determine the cost incurred by the business for each additional unit of labor, we can look at the change in variable cost as the number of workers increases.

From the given data, we can calculate the variable cost per additional worker:

1. From 5 workers to 10 workers:

   • Variable cost increases from $80 to $160.
   • Change in variable cost = $160 - $80 = $80.
   • Number of additional workers = 10 - 5 = 5 workers.
   • Cost per additional worker = $80 / 5 = $16.

2. From 10 workers to 15 workers:

   • Variable cost increases from $160 to $240.
   • Change in variable cost = $240 - $160 = $80.
   • Number of additional workers = 15 - 10 = 5 workers.
   • Cost per additional worker = $80 / 5 = $16.

3. From 15 workers to 20 workers:

   • Variable cost increases from $240 to $320.
   • Change in variable cost = $320 - $240 = $80.
   • Number of additional workers = 20 - 15 = 5 workers.
   • Cost per additional worker = $80 / 5 = $16.

In all cases, the cost incurred by the business for each additional unit of labor is $16.

Thus, the correct response is $16.