## Costs in the Short Run

Read this section about how to calculate costs in the short-run like variable and marginal costs. Make sure to answer the "Try It" questions.

### LEARNING OBJECTIVES

#### Answer to Try It Question

- $135

Correct. 3 workers are required to produce 45 units/hour and each gets paid at $15 so labor cost if 3 * $15 = $45. The cost of material is $2 per unit so 45 * $2 = $90 is the cost of material. Total cost for 45 units = $45 + $90 - $135 - $105

Incorrect. 3 workers are required to produce 45 units/hour and each gets paid at $15 so labor cost is 3 * $15 = $45. The cost of material is $2 per unit so $45 * $2 = $90 is the cost of material. Total cost for 45 units = $45 + $90 - $135. - $47

Incorrect. Don't forget the cost of material for 45 units. The cost of material is $2 per unit so $45 * 2 = $90 is the cost of material. 3 workers are required to produce 45 units/hour and each gets paid at $15 so labor cost if 3 * $15 = $45. Total cost for $45 units = $45 + $90 - $135.

Number of Workers |
Production (units/hr) |
Cost per worker per hour |
Total labor cost |
Cost of Materials |
Total Cost |

1 | 10 | $15 | $15 | 20 | 35 |

2 | 30 | $15 | $30 | 60 | 90 |

3 | 45 | $15 | $45 | 90 | 135 |

4 | 55 | $15 | $60 | 110 | 170 |

5 | 60 | $15 | $75 | 120 | 195 |