Suppose that a company currently employs 1 comma 000

Question

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 ​$2

million.
What is the average product of​ labor?
million.

Answer 1

To find the average product of labor, we need to divide the total output by the total number of workers.

Average Product of Labor = Total Output / Total Workers

Total Output = 4 million units
Total Workers = 1,000

Average Product of Labor = 4 million / 1,000 = 4,000 units

Therefore, the average product of labor is 4,000 units.