In: Economics
Table 1
Number of Workers |
Sheets of Metal per day (in pounds) |
0 |
0 |
1 |
10 |
2 |
22 |
3 |
32 |
4 |
40 |
5 |
46 |
6 |
50 |
MC=change in TC/Change in Q
= 13x7 - 12x6
= 19
a) FC=fixec cost of 2000
VC=400 per labor
MC=change in TC/Change in Q
TC=FC+VC
AFC=FC/Q
AVC=VC/Q
AC=AFC+AVC
Number of Workers | Sheets of Metal per day (in pounds) | FC | VC | TC | MC | AFC | AVC | AC |
0 | 0 | 2,000.00 | 0.00 | 2,000.00 | ||||
1 | 10 | 2,000.00 | 400.00 | 2,400.00 | 40.00 | 200.00 | 40.00 | 240.00 |
2 | 22 | 2,000.00 | 800.00 | 2,800.00 | 33.33 | 90.91 | 36.36 | 127.27 |
3 | 32 | 2,000.00 | 1,200.00 | 3,200.00 | 40.00 | 62.50 | 37.50 | 100.00 |
4 | 40 | 2,000.00 | 1,600.00 | 3,600.00 | 50.00 | 50.00 | 40.00 | 90.00 |
5 | 46 | 2,000.00 | 2,000.00 | 4,000.00 | 66.67 | 43.48 | 43.48 | 86.96 |
6 | 50 | 2,000.00 | 2,400.00 | 4,400.00 | 100.00 | 40.00 | 48.00 | 88.00 |
b) Fixed cost remains same at all level of output
Variable cost changes as the firm hires one ore labor
Total cost keeps on increasing as the firm increases its output.
Marginal cost first declines and then increases.
AFC will keep decreasing as FC remains constant whereas output is increasing.
AVC will decrease and then start increasing
AC curve stays above AVC curve and it also decreases at first and then increases.
MC will cut AVC and AC from below at their minimum points.
c)
d)