Question

Question 36 1 pts A firm produces baseball bats using labor as its variable input and capital as its fixed input. Output 10 50 Total Cost $50 $210 $550 $600 100 200 If the output of baseball bats is zero, then what is the number of labor hours the firm is using? O Any number greater than zero. O More information is needed to answer the question; specifically, the average variable cost must be known. O Any number greater than fifty. Oo

Answer 1

Answer 36

The correct answer is (d) 0.

Variable input is the input which depends on amount of output produced and Fixed input is the input which is independent of amount of output produced

Thus he will still incur fixed cost or hire fixed input if he produces or not and thus If Output is 0 he will still incur fixed cost and hence hiring fixed input. Here Capital is fixed input and thus if output of base ball bats = 0, he is still hiring some units of capital.

If He didn't produce anything then this means that he will not hire any variable input because this will result in his unnecessary extra cost of hiring variable input and hence can avoid this by not hiring any variable input.

Hence Variable inputs are not hired if no output is produced i.e. Variable cost = 0 when Output = 0.(Note : when output = 0 and firm is incurring some cost then that cost will be the cost of hiring fixed input only)

Here Variable input is Labor and output of baseball bats = 0. Thus as discussed above no units of Labor will get hired.

Thus, Amount of labor hired = 0

Hence, the correct answer is (d) 0