Question

1. Figure the costs in the green shaded cells

   At what quantity does diminishing marginal returns take affect?

2. Short-run Costs
   Quantity	Total Fixed Cost	Average Fixed Cost	Total Variable Cost	Average Variable Cost	Total Cost	Average Total Cost	Marginal Cost
   0	$ 140.00	-	-	-		-	-
   5			$ 100.00
   10			180.00
   15			245.00
   20			300.00
   25			350.00
   30			405.00
   35			467.50
   40			540.00
   45			627.50
   50			732.50
   55			862.50
   60			1,027.50

Answer 1

Q	TFC	AFC	TVC	AVC	TC	ATC	MC
0	140				140.00
5	140	28.00	100.00	20.00	240.00	48.00	20.00
10	140	14.00	180.00	18.00	320.00	32.00	16.00
15	140	9.33	245.00	16.33	385.00	25.67	13.00
20	140	7.00	300.00	15.00	440.00	22.00	11.00
25	140	5.60	350.00	14.00	490.00	19.60	10.00
30	140	4.67	405.00	13.50	545.00	18.17	11.00
35	140	4.00	467.50	13.36	607.50	17.36	12.50
40	140	3.50	540.00	13.50	680.00	17.00	14.50
45	140	3.11	627.50	13.94	767.50	17.06	17.50
50	140	2.80	732.50	14.65	872.50	17.45	21.00
55	140	2.55	862.50	15.68	1002.50	18.23	26.00
60	140	2.33	1027.50	17.13	1167.50	19.46	33.00

TFC=140 fixed at levels of output

AFC=TFC/Q

AVC=TVC/Q

TC=TFC+TVC

ATC=TC/Q

MC=change in TC/change in Q

The diminishing returns sets in when the firm changes its total output so that its AVC starts rising which we can see from the table happens at Q=40 due to the law of diminishing returns as firms hire more labor there will come a point when the marginal product of labor falls and AVC starts rising along with MC