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 Microeconomics Question
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Posted on 09-27-11 8:09 AM     Reply [Subscribe]
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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.


 
Posted on 09-27-11 8:20 AM     Reply [Subscribe]
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Sorry, this is the full table:

Labor, X

TPP

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

 

 

 

 

 

 

 

 

 


 
Posted on 09-27-11 8:22 AM     [Snapshot: 21]     Reply [Subscribe]
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 and the two related questions:

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.

Appreciate all the help I can get, along with the explanations for b and c.  Thanks!


 


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