Author Question: Refer to Figure 8.1. At the profit-maximizing level of output, A) AVC is minimized. B) ATC is ... (Read 65 times)

james9437 · **on:** Jul 1, 2018

Refer to Figure 8.1. At the profit-maximizing level of output,

A) AVC is minimized.
B) ATC is minimized.
C) MC is minimized.
D) total cost is minimized.
E) no costs are minimized.

Question 2

Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor).

What is the average product of labor? A) AP = 5
B) AP = 5K
C) AP = 5L
D) AP = 5K/L