Economics 1021A/B Study Guide - Quiz Guide: Marginalism, Marginal Revenue, Marginal Utility
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17 Oct 2018
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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.