Assume fixed costs are 470 and labor costs $20 per unit. The first laborer produces 20 units of output. Subsequent hires add 5 units less to production than the previous worker. Thus the second worker adds 15, the third adds 10 etc. Which of the following is a true statement?
A. Average fixed cost is 10 when output is 45.
B. Marginal cost keeps falling as the number of laborers hired increases.
C. At an output of 20 the total cost is $20.
D. Average total cost at an output of 50 is 11.
Answer: D
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