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cost3 - b Now suppose the price of labor is $400 a week and...

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Additional Problem 3: Production Costs The total product schedule of Rubber Duckies, Inc., a firm making rubber boats, is described by the following: Labor (L) Output (Q) (number of workers (rubber boats employed per week) per week) 1 1 2 3 3 6 4 10 5 15 6 21 7 26 8 30 9 33 10 35 a) Calculate the marginal product and average product. What is the relationship between these functions at output rates below 21 boats a week? Why? At output rates above 21 boats per week? Why? (Draw a graph to illustrate your answer).
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Unformatted text preview: b) Now suppose the price of labor is $400 a week, and the total fixed cost is $10,000 a week. Calculate the firm's total cost, total variable cost, total fixed cost, average total cost, average variable cost, average fixed cost, and marginal cost. c) Suppose that total fixed cost increases to $11,000 per week. How will this affect the firm's average total cost, average fixed cost, average variable cost, and marginal cost? Explain thoroughly....
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