Americans consume more chicken than any other meat, in part because it\'s relati

Q: Americans consume more chicken than any other meat, in part because it's relati

a) Fixed cost is the cost incurred when output is 0. From the given graph, it can be seen that the fixed cost is $800 b) When Q = 2000, TC = 1200 Variable cost = TC – FC = 1200-800 = 400 Cost per labor = $100 Thus, total labor employed = 400/100 = 4 labor units c) This happens because the variable cost increases, as more output means hiring more labor

ID: 1201472 • Letter: A

Question

Americans consume more chicken than any other meat, in part because it's relatively cheap. Why is it so heap? Modern technology has made processing the birds relatively easy, although some consider it inhumane. Suppose Ralph has a chicken processing plant with the total cost function shown below. What is Ralph's fixed cost? Ralph pays his workers $100 each and labor is the only variable cost. At a quantity of 2000 chickens, how many workers does he hire? Why does the total cost curve get steeper as output increases? The fixed cost increases. The variable cost increases. There are diminishing returns to labor. There are increasing returns to scale.

Explanation / Answer

Fixed cost is the cost incurred when output is 0.

From the given graph, it can be seen that the fixed cost is $800

When Q = 2000, TC = 1200

Variable cost = TC – FC = 1200-800 = 400

Cost per labor = $100

Thus, total labor employed = 400/100 = 4 labor units

This happens because the variable cost increases, as more output means hiring more labor

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Americans consume more chicken than any other meat, in part because it\'s relati

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