Suppose Ralph has a chicken processing plant with the total cost function shown in the accompanying table.

What is Ralph?s fixed cost?

Ralph?s fixed cost _________

Ralph pays his workers $100 each, and labor is the only variable cost. At a quantity of 6000 chickens, how many workers does he hire?

Number of worker Ralph hires _________

Why does total cost increasing faster as output increases?

There are increasing returns to scale.

The variable costs increases.

There are diminishing returns to labor.

The fixed cost increases.

Quantity of Chickens 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Total Cost ($) 800 1,000 1,200 1,400 1,500 1,600 1,800 2,000 2,400