Posted by: dabbamanche September 27, 2011
Microeconomics Question
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 Hi, can someone please help me with the following questions?

Each unit of input, X, costs $10.  Fixed costs are $50, regardless of the level of output.

 a.                   Complete the table below.

 

 

 

Labor, X

 

Total

Output (TPP)

Marginal

Physical

Product (MPP)

 

 

 

TFC

 

 

 

TVC

 

 

 

TC

 

 

 

AFC

 

 

 

AVC

 

 

 

ATC

 

 

 

MC/unit

0

0

 

 

 

 

 

 

 

 

1

15

 

 

 

 

 

 

 

 

2

45

 

 

 

 

 

 

 

 

3

70

 

 

 

 

 

 

 

 

4

90

 

 

 

 

 

 

 

 

5

105

 

 

 

 

 

 

 

 

6

110

 

 

 

 

 

 

 

 

7

112

 

 

 

 

 

 

 

 

 b.                  If the product can be sold for $0.75 per unit, what is the optimal level of output?

  

c.                   Find the level of profit at the optimal level of output.  Explain what would happen if the firm produced one more unit of output in terms of marginal cost and marginal revenue.


Please provide explanations for b and c.  Appreciate all the help I can get.  It's a school assignment. Thanks.

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