Question

Suppose you are given the following information:             Price of variable input is $40/unit; Price of...

Suppose you are given the following information:

            Price of variable input is $40/unit; Price of fixed input is $50/unit

a. Using the above information, complete the followingtable

Units of Fixed Input

Units of Variable Input

Output

Marginal Product

TFC

TVC

AFC

AVC

ATC

MC
2 0 0
2 1 10
2 2 25
2 3 45

2

2

2

2

4

5

6

7

8

70

100

125

140

150

b. Draw graphs for AFC, AVC, ATC, and MC.

c. Derive the relationship between change in Marginal Cost and Marginal Product

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