Question
Use the following production function to answer the questions below where labor (L) is measured in...
Use the following production function to answer the questions below where labor (L) is measured in workers per day and output (Q) is number of units per day. Compute marginal physical product (MPP), marginal cost (MC), and average total cost (ATC)
|
L |
Q |
MPP |
TVC |
TC |
MC |
ATC |
|
0 |
0 |
$0 |
$12 |
|||
|
1 |
8 |
8 |
20 |
|||
|
2 |
20 |
16 |
28 |
|||
|
3 |
28 |
24 |
36 |
|||
|
4 |
32 |
32 |
44 |
|||
|
5 |
34 |
40 |
52 |
Suppose a firm had two sewing machines and could vary only the amount of labor input.
a. What amount of labor is associated with the point of diminishing returns?
b. What is the amount of this firm’s fixed costs?
c. What is the wage rate?
d. Graph Marginal Cost and Average Total Cost.
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Use the following production function to answer the questions below where labor (L) is measured in...
Use the following production function to answer the questions
below where labor (L) is measured in workers per day and output (Q)
is number of units per day. Compute marginal physical product
(MPP), marginal cost (MC), and average total cost (ATC)
L
Q
MPP
TVC
TC
MC
ATC
0
0
$0
$12
1
8
8
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20
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28
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24
36
4
32
32
44
5
34
40
52
Suppose a firm had two sewing machines and...
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37
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57
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76
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94
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111
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# of Workers
Q of Snack Cakes
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TC
MC
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0
1
5
1.6
10
2
15
2.35
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2.75
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3.22
30
3.75
35
4.35
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45
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6.6
55
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5
6
7
8 9
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120 140 155
165 168
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TVC
TC
AFC
AVC
ATC
MC
150
0
(1)
(11)
(21)
(31)
(41)
2
150
70
(2)
(12)
(22)
(32)
(42)
3
150
130
(3)
(13)
(23)
(33)
(43)
4
150
240
(4)
(14)
(24)
(34)
(44)
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150
300
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(25)
(35)
(45)
6
150
360
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(36)
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TR
MR
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/Loss
0
3
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-
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-
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1
6
2
12
3
21
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33
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49
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