Americans consume more chicken than any other meat in part b

Americans consume more chicken than any other meat, in part because it\'s relatively cheap. Why is it so cheap? Modern technology has made processing the birds relatively easy, although some consider it inhumane. Suppose Ralph has a chicken processing plant with the total cost function shown below.

Solution

Ans: a) His fixed cost is that what he has to bear when the production is zero. From the graph we see that the Fixed cost is $800

b) At the quantity of 7000 chickens, we see that the total cost = $2000 of which his fixed cost is $800. Thus VC= $1200. Then number of workers @ $100 per worker = 12 men

c) There are diminishing returns to labour due to which we see that the total cost curve gets steeper.