Economics
the price of labor is $100 per unit and the price of capital is $20 per unit. What will the long-run total cost and long-run average cost of producing 120 units?
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The long-run total cost of producing 120 units is $14,400. This is calculated by multiplying the labor cost of 120 units ($12,000) by the capital cost of 120 units ($2,400). The long-run average cost is $120 per unit, which is calculated by dividing the long-run total cost (14,400) by the number of units produced (120). This means that it costs an average of $120 per unit to produce 120 units of the good in the long-run.
