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28 Sep 2019
Use the following information on a hypothetical short-run production function to answer questions A-C.
The price of labor is $20 per day.
Ten units of capital are used each day, regardless of output level.
The price of capital is $50 per unit.
(A). Calculate the marginal product (MP) and average variable product (AP) of each unit of labor input.
(B). Calculate total (TC), average total (ATC), average variable (AVC), and marginal costs (MC).
(C). Can you tell where diminishing marginal returns sets in?
Labor (L)
Output (Q)
MP
AP
TC
ATC
AVC
MC
5
120
--
--
6
140
7
155
8
165
9
168
Use the following information on a hypothetical short-run production function to answer questions A-C.
The price of labor is $20 per day.
Ten units of capital are used each day, regardless of output level.
The price of capital is $50 per unit.
(A). Calculate the marginal product (MP) and average variable product (AP) of each unit of labor input.
(B). Calculate total (TC), average total (ATC), average variable (AVC), and marginal costs (MC).
(C). Can you tell where diminishing marginal returns sets in?
| Labor (L) | Output (Q) | MP | AP | TC | ATC | AVC | MC |
| 5 | 120 | -- | -- | ||||
| 6 | 140 | ||||||
| 7 | 155 | ||||||
| 8 | 165 | ||||||
| 9 | 168 |
Kristelle BalandoLv10
28 Sep 2019
