ECN 201 Lecture Notes - Lecture 64: Marginal Product
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Each unit of input, X, costs $10. Fixed costs are $50, regardless of the level of output.
a.Complete the table below.
Labor, X | Total Output (TPP) | Marginal Physical Product (MPP) | TFC | TVC | TC | AFC | AVC | ATC | MC/unit |
0 | 0 | ||||||||
1 | 15 | ||||||||
2 | 45 | ||||||||
3 | 70 | ||||||||
4 | 90 | ||||||||
5 | 105 | ||||||||
6 | 110 | ||||||||
7 | 112 |
b.If the product can be sold for $0.75 per unit, what is the optimal level of output?
C. Find the level of profit at the optimal level of output. Explain what would happen if the firm produced one more unit of output in terms of marginal cost and marginal revenue.
From your knowledge of the relationships among the various cost functions, complete the following table?
Q |
TTC |
TFC |
TVC |
ATC |
AFC |
AVC |
MC |
0 |
125 |
||||||
10 |
5 |
||||||
20 |
10.50 |
||||||
30 |
110 |
||||||
40 |
255 |
||||||
50 |
3 |
||||||
60 |
3 |
||||||
70 |
5 |
||||||
80 |
295 |
Construct the total cost schedule using data below for a firm operating in the short-run.
Total Output (Q) | Total fixed cost (TFC) | Total variable cost (TVC) | Total cost (TC) | Marginal Cost (MC) | Average fixed cost (AFC) | Average variable cost (AVC) | Average total cost (ATC) |
0 | 50 | 0 | 50 | ||||
1 | 70 | ||||||
2 | 85 | ||||||
3 | 95 | ||||||
4 | 100 | ||||||
5 | 110 | ||||||
6 | 130 | ||||||
7 | 165 | ||||||
8 | 215 | ||||||
9 | 275 |