Question

Melody owns and runs a hot yoga studio. Assume that Melody has no fixed costs and that her only costs of production are the instructors she hires to teach classes. Melody's output is measured in terms of the number of students who take classes in a given week. When Melody hires one instructor, the studio's output is 400 students. When Melody hires two instructors, the studio's output is 600 students, and when Melody hires three instructors, the studio's output is 700 students. The average total cost when Melody hires two instructors is $10. What is the total cost when Melody hires two instructors?

A) $12,000.
B) $4,000.
C) $20.
D) $6,000.

Answer 1

D) $6,000

Step-by-step explanation:

The total cost when Melody hires two instructors is $6,000 because:

Average total cost = Total cost / Quantity

Total cost= Average total cost * Quantity

Considering that when Melody hires 2 instructors the studio's output is 600 students:

Total cost= $10 * 600

Total cost= $6,000