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cost5a - variable cost and the total fixed cost below 2(c...

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Additional Problem #5 Answers : Production Costs (a) You are given the following information: TFC = $300, and P labor = $20/hour. Fill in the blanks in the following table. Labor (hours) TP = Q MP TFC TVC TC ATC AVC AFC MC 0 0 $300 $ 0 $300 ------ ------ ------ 1 50 50 300 $20 320 $6.40 $ .40 $6.00 $ .40 2 110 60 300 40 340 3.09 .36 2.73 .33 3 150 40 300 60 360 2.40 .40 2.00 .50 4 185 35 300 80 380 2.05 .43 1.62 .57 5 215 30 300 100 400 1.86 .46 1.40 .66 6 235 20 300 120 420 1.78 .51 1.27 1.00 7 240 5 300 140 440 1.83 .58 1.25 4.00 (b) Using the data from the table on the first page, graph the total cost, total
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Unformatted text preview: variable cost, and the total fixed cost below. 2 (c) Using the data from the table on the first page, graph the average total cost, average variable cost, average fixed cost, and marginal cost below. (d) The point of diminishing returns occurs when total product, or output, is 110 , the amount or labor hours are 2 , the marginal product is 60 , and the marginal cost is .33 . (e) This production function shows ↑ ing then ↓ ing (increasing, diminishing, constant, combination of all three) returns. 1 10 50 100 150 200 250 OUTPUT AT AVC AFC M 100 200 300 400 500 50 100 150 200 250 OUTPUT T TF TV $...
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