Question

Paul realizes that if he employs an additional bike builder, then he will be able to...

Paul realizes that if he employs an additional bike builder, then he will be able to increase the number of bikes built in his bike shop by 15 bikes per day. The daily salary he will need to pay the bike builder is $200. How much is the cost for an additional bike? Describe the general relationship between the marginal product and marginal cost curves.

Homework Answers

Answer #1

Cost for an additional bike = $200 / 15 = $13.33

When marginal product increases, the marginal cost decreases and when marginal product decreases, the marginal cost increases. According to law of variable proportion, in the short run, keeping some factors as fixed in production process, when more and more units of a variable factor increases, marginal product increases at an increasing rate, then marginal product increases at an decreasing rate and after some time marginal product becomes negative.

Thus, the general relationship between the marginal product and marginal cost curve is that these two curves moves in opposite direction.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1) suppose a consumer consumes beer and wine. the price for beer increases and the consumer...
1) suppose a consumer consumes beer and wine. the price for beer increases and the consumer contiunes to buy the same quantity of beer as before an increase in price. show on graph the price consumption curve and beer demand curve on two saperate graphs. discuss the direction of the income and substitute effects. is beer normal or inferior, explain 2) John notices that if he hires additional workers then he will be able to increase production by 12 per...
1. Ralph owns a small pizza restaurant, where he works full-time in the kitchen. His total...
1. Ralph owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 per month. Ralph could earn $35,000 per year as the manager of a competing pizza restaurant nearby. His total explicit costs for the year were a. $24,000. b. $66,000. c. $72,000. d. $60,000. e. $6,000....
31.a. Marcel, due to health problems, announced that he was selling his electronic equipment business. Paul,...
31.a. Marcel, due to health problems, announced that he was selling his electronic equipment business. Paul, knowing Marcel's business activities, sent him an offer to purchase for $ 450,000, of which $ 75,000 payable immediately, with the balance payable in installments over the next two years. Marcel immediately emailed Paul stating, “The price and all other terms seem fair, except I need a larger first payment - say $ 125,000. Tell me how much you can increase the first payment....
The Cherry & White Bike Company is a small closely-held company with two owners. Its two...
The Cherry & White Bike Company is a small closely-held company with two owners. Its two owners, Charlotte and George, have decided to expand the business. You are CWB’s accountant. Your responsibilities include maintaining all accounting records and preparing annual financial statements. CWB wants to take out a loan to expand its business in the coming year. The banks and lending institutions require a set of financial statements prepared under U.S. GAAP to evaluate CWB’s credit worthiness. You must prepare...
1.Suppose you are running your own flower delivery business (called Here Comes the Bloom) and have...
1.Suppose you are running your own flower delivery business (called Here Comes the Bloom) and have the following financial information (per year): total revenues from sales are $260,000, labor costs are $85,000, rent is $20,000, materials are $33,000, vehicle related costs (fuel, insurance, maintenance) are $10,000 and utilities are $7,000. You own the delivery van and could rent it out for $6,000 per year if you weren’t using it to run your own business. You have a standing offer to...
Each of the clinic’s three departments (administration, general peds and neonatology) has a cost code in...
Each of the clinic’s three departments (administration, general peds and neonatology) has a cost code in the practice’s accounting software and all the practice’s expenses are assigned to one of these three areas. The practice manager is interested in better understanding the profitability of each division, but realizes that to do so she must allocate administrative cost to the two divisions. The practice administrator gathers the following information about the two clinical departments for the past month Monthly revenue Claims...
Joe's Hamburger Grill Discussion Please read the case and answer the questions at the end. Joe's...
Joe's Hamburger Grill Discussion Please read the case and answer the questions at the end. Joe's Hamburger Grill has been doing business in the same location for the past 20 years. The Grill is located in Phoenix, Arizona, and caters to college students by providing some of the world's biggest hamburgers in a fun and casual dining atmosphere. Joe looks back with fondness on the 20 years that have passed since he first opened the grill. His primary motivation for...
1) Xavier opens up a lemonade stand for two hours. He spends $10 for ingredients and...
1) Xavier opens up a lemonade stand for two hours. He spends $10 for ingredients and sells $60 worth of lemonade. In the same two hours, he could have mowed his neighbor’s lawn for $40. What is Xavier’s accounting profit? What is Xavier’s economic profit? 2) A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught: Hours                   Quantity of fish (in pounds) 0 10 18 24 28 30 What...
Hayden Tool Company Case The Hayden Tool Company is located in a large manufacturing center in...
Hayden Tool Company Case The Hayden Tool Company is located in a large manufacturing center in southern Connecticut. It is a small, family owned corporation with the majority of stock ownership in the hands of Mr. Hayden, the founder and active manager of the business. The company is engaged in the manufacture of machine tools and dies and of machine parts and subassemblies, all on contract for other manufacturing concerns. The shop consists of one large building and, except for...
O.J. Simpson plans to build a Park that runs for the next 25 years. O.J. would...
O.J. Simpson plans to build a Park that runs for the next 25 years. O.J. would immediately need to start construction on the land which he bought 2 years ago. Current market value of the land is $4 million and is expected to be sold for $4 million at the end of year 25. $27.9 million need to be spend for computers and other equipment. Total salvage value of the equipment will be $2.9 million. A new building will cost...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT