Microeconomics question - Average Variable Cost?

Question

This is a question I recently missed on my microeconomics test, and I need help understanding it.

Labor, the variable input cost $300 per unit. When 22 units of labor are employed the average variable cost (AVC) of the output is....?

A. $1.79

B. $6.60

C. $13.64

D. $39.29

The answer is D, but how do I get this answer?

Answer 1

For answer D this question is incomplete.

You need to know output in order to calculate right. And output will depend on used factors of production (labor in this case), so for L=22; Q=APL*L

APL - average product per labor.

L - labor.

TVC=VC*Q

TVC - total variable cost (300)

Q - output.

So just add how much output produces each worker on average.

For instance if each worker produces 1 unit of output and the only input is labor then:

Q(22)=22*1= 22 units of output.

TVC(22)=300

AVC=TVC/Q = 300/22 = 13.64

For case if each worker produces 0.347 units of output then:

Q=22*0.347 = 7.6355

AVC= 300/7.6355 = 39.29