The following table summarizes the short-run production function for your firm. Your product sells for $10 per unit, labor costs $40per unit, and the rental price of capital is $10 per unit. Complete the following table, and then answer the accompanying questions.

L K Q MPL APL APK VMPL
0 5 0
1 5 20
2 5 60
3 5 120
4 5 160
5 5 180
6 5 190
7 5 190
8 5 180
9 5 160
10 5 120
11 5 60

(a) Which inputs are fixed inputs? Which are the variable inputs?

(b) How much are your fixed costs?

(c) What is the variable cost of producing 40 units of output?

(d) How many units of the variable input should be used to maximize profits?

(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 do decrease marginal returns exist?

(h) Over what range of variable input usage do negative marginal returns exist?

Question

K	L	Q	MP_K	AP_K	AP_L	VMP_K
0	5	0
1	5	10
2	5	30

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

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