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1.) Complete the table below. Here are some useful (but un- needed) hints. Each worker costs $30 to employ. Total cost = fixed cost + variable cost Marginal Total Workers Variable Fixed Cost Total Cost Marginal Product Output Cost Cost 0 0 0 60 0 60 0 1 4 4 60 30 90 7.50 2 8 3.75 3 10 4 8 30 What is the average total cost of producing the first four units? Why does marginal cost rise when the fourth worker is employed? If each unit of output sells for $10.00 what is the firms profit if it produces 30 units?
Expert Solution
|
workers |
Marginal product | Total output | Fixed cost | Variable Cost | Total Cost | Marginal cost |
| 0 | 0 | 0 | 60 | 0 | 60 | - |
| 1 | 4 | 4 | 60 | 30 | 90 | 7.50 |
| 2 | 8 | 12 | 60 | 60 | 120 | 3.75 |
| 3 | 10 | 22 | 60 | 90 | 150 | 3 |
| 4 | 8 | 30 | 60 | 120 | 180 | 3.75 |
Answer : Table showing relevant information :
Average total cost for first four units = Total Cost/ Output = 90/4 = 2.25
Answer Marginal cost of 4th worker has been start declining at rapid speed. So, marginal; cost of production has been increased.
Profit for selling 30 units of output = Total revenue - Total cost = $300 - $180 =$120
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