Assignment 3 - Spencer Lane 10966400 Prof Cassey Econ 101-1...

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Spencer Lane 10966400 Prof. Cassey Econ 101-1 Homework # 3 1a. Marginal cost is the change in a firms total cost from producing one more unit of a good or service. MC=ΔTC ΔQ 1b. Average total cost is the total cost divided by the quantity of output produced. ATC= TC QP= quantity of output produced QP 1c. Marginal product of labor is the additional output a firm produces as a result of hiring one or more worker. MP Labor = ΔQP QP= Quantity of output produced ΔL L= Labor 1d. Total product is the amount of output as one resource varies fixing the other resources at a constant. Output= Q = f(K,L,…) Q= f(x) K= capital, fixed L= labor, varies 1e. Average product of labor is the total output produced by a firm divided by the quantity of workers. AP Labor = QP W= Quantity of workers W QP= Quantity of output produced 2. Supply: P = 5Q +250 Demand: P = 126,250-100Q 5Q+250=126,250-100Q 105Q+250=126,250 105Q=126,000 Q=1200 150 doughnuts = 8 doughnuts per shop 3a. The law of diminishing marginal returns is the principle that, at some point, adding more of a
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