Complete the table directly below by calculating marginal product and average product. Explain why marginal product first rises, then declines, and ultimately becomes negative. What bearing does the law of diminishing returns have on short-run costs? Be specific.
Inputs of labor Total product Marginal product Average product
0 0
1 13
2 34
3 51
4 65
5 74
6 80
7 83
8 79
Complete the table directly below by calculating marginal product and average product. Explain why marginal product first rises, then declines, and ultimately becomes negative. What bearing does the law of diminishing returns have on short-run costs? Be specific.
Inputs of labor Total product Marginal product Average product
0 0
1 13
2 34
3 51
4 65
5 74
6 80
7 83
8 79
Related textbook solutions
Related questions
The following table summarizes the short-run production function for your firm. Your product sells for $8 per unit, labor costs $12 per unit, and the rental price of capital is $20 per unit. Complete the following table and then answer the accompanying questions.
1. Which inputs are fixed inputs? Which are variable inputs?
2. What is the variable cost of producing 60 units of output?
3. How many units of the variable input should be used to maximize profits? Why?
4. What are your maximum profits?
5. Over what range of variable input usage does increase marginal returns exist?
6. Over what range of variable input usage do decrease marginal returns exist?
|
Output |
Units of Capital |
Units of Labor |
Marginal Product of Labor |
MRP of Labor |
|
0 |
6 |
0 |
-- |
|
|
10 |
6 |
1 |
||
|
30 |
6 |
2 |
||
|
60 |
6 |
3 |
||
|
80 |
6 |
4 |
||
|
90 |
6 |
5 |
||
|
95 |
6 |
6 |
||
|
95 |
6 |
7 |
||
|
90 |
6 |
8 |
||
|
80 |
6 |
9 |
||
|
60 |
6 |
10 |
||
|
30 |
6 |
11 |
The following table summarizes the short-run production function for your firm. Your product sells for $8 per unit, labor costs $12 per unit, and the rental price of capital is $20 per unit. Complete the following table and then answer the accompanying questions.
(a) Which inputs are fixed inputs? Which are variable inputs?
(b) How much are your fixed costs?
(c) What is the variable cost of producing 60 units of output?
(d) How many units of the variable input should be used to maximize profits? Why?
(e) What are your maximum profits?
(f) Over what range of variable input usage does increase marginal returns exist?
(g) Over what range of variable input usage does decrease marginal returns exist?
|
Output |
Units of Capital |
Units of Labor |
Marginal Product of Labor |
MRP of Labor |
|
0 |
6 |
0 |
-- |
|
|
10 |
6 |
1 |
||
|
30 |
6 |
2 |
||
|
60 |
6 |
3 |
||
|
80 |
6 |
4 |
||
|
90 |
6 |
5 |
||
|
95 |
6 |
6 |
||
|
95 |
6 |
7 |
||
|
90 |
6 |
8 |
||
|
80 |
6 |
9 |
||
|
60 |
6 |
10 |
||
|
30 |
6 |
11 |
