Question

# L W MP TP MC TVC TFC TC 1 200 10 2 200 30 3 200...

 L W MP TP MC TVC TFC TC 1 200 10 2 200 30 3 200 75 650 4 200 40 5 200 140

Please answer the next 7 questions based on the table presented above.

The TFC associated with 30 units of output is equal to ________ dollars.

The TVC of producing 4 units of output is equal to ___________ dollars.

MP is at a maximum when MC is equal to _______ dollars.

Diminishing returns sets in with the addition of the ________ worker.

The TFC associated with 40 units of output is equal to ___________ dollars.

We can show the above information in the following table:

 L W MP TP MC TVC = L*W TFC TC= TFC+TVC 1 200 0 10 0 200 50 250 2 200 30 40 200 400 50 450 3 200 35 75 200 600 50 650 4 200 40 115 200 800 50 850 5 200 25 140 200 1000 50 1050

From the above table it appears that TFC for all values of output or Total product (TP) is fixed at 50 dollars.

1. Therefore, TFC associated with 30 units of output is equal to 50 dollars

2. From the above table, we find that when TP or total output is 10 units, the TVC =200

Therefore, when total output is 4 units, the TVC = 200/10*4=80 dollars

3. MP is at maximum when MC is equal to 200 dollars.

4. Diminishing returns sets with the addition of the fourth worker.

5. The TFC associated with 40 units of output is equal to 50 dollars.

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