Question

A firm's product sells for $4 per unit in a highly competitive market. The firm produces output using capital (which it rents at $25 per hour) and labor (which is paid a wage of $30 per hour under a contract for 20 hours of labor services). Complete the following table and use that information to answer the questions that follow

Answer 1

The subject of this question is Business. It asks about the cost of producing a home exercise cycle in a highly competitive market. To calculate the total cost, we need to consider the cost of labor and the cost of capital.

Step-by-step explanation:

The subject of this question is Business. The question asks about the cost of producing a home exercise cycle in a highly competitive market. To calculate the total cost, we need to consider the cost of labor and the cost of capital. The labor is paid a wage of $30 per hour for 20 hours, resulting in a total labor cost of $600. The capital is rented at $25 per hour, and to produce one exercise cycle, the firm needs one machine for a certain number of hours. By analyzing the table provided, we can determine the total cost of producing one exercise cycle based on different combinations of labor and capital.