Question

In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the following table:

Derive the firm's total wage costs and marginal factor cost at each level of Labor supplied.

Short answer

Firm's total wage cost is calculated by multiplying the number of labor provided with the specified hourly wages at each level.

Step-by-step solution

Introduction

The differential cost is that the change within the total cost that arises when the number produced is incremented, the price of manufacturing additional quantity. In some contexts, it refers to an increment of $1$ unit of output, and in others it refers to the speed of change of total cost as output is increased by an infinitesimal amount. differential cost is different from monetary value, which is that the total cost divided by the amount of units produced.

Given Information

Firm's total wage cost is calculated by multiplying the number of labor provided with the specified hourly wages at each level. the full wage cost increases because of a rise within the required hourly wages.

Explanation

The marginal factor cost at each level is measured by considering the extra quantity of labor suppliedand therefore the required hourly wages.
The following may be a table which represents the price and output structure of a firmwithin the short-run:

Below table shows the formulas used for the calculation:

Graph

Below is that the required graph: