Draw the marginal-cost and average-total-costcurves for a typical firm. Explain why thecurves have the shapes that they do and whythey cross where they do.
Nimbus, Inc., makes brooms and then sellsthem door-to-door. Here is the relationshipbetween the number of workers and Nimbus’soutput in a given day: a. Fill in the column of marginal products.What pattern do you see? How might youexplain it? b. A worker costs $100 a day, and the firm hasfixed costs of $200. Use this information tofill in the column for total cost. c. Fill in the column for average total cost.(Recall that ATC = TC/Q.) What pattern doyou see? d. Now fill in the column for marginal cost.(Recall that MC = ΔTC/ΔQ.) What pattern doyou see? e. Compare the column for marginal productand the column for marginal cost. Explainthe relationship. f. Compare the column for average total costand the column for marginal cost. Explainthe relationship. Chapter 14
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