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Calculating AP, MP, AVC, TC, FC, MC, TC and ATC

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Problem 1

Number Of Workers Output
0 0
1 50
2 110
3 300
4 450
5 590
6 665
7 700
8 725
9 710
10 705

The table above shows the weekly relationship between output and number of workers for a factory with a fixed size of plant. Using Excel,
a. Calculate the marginal product of labor.
b. Calculate the average product of labor.
c. At what point do diminishing returns set in?

Problem 2

Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information and using Excel, fill in the missing information in the table below.

Number of Worker Hours Output Marginal Product Fixed Cost Variable Cost Total Cost MC AVC ATC
0 0 -- 20,000 -- -- --
50 400 20,250
100 900 20,500
150 1300 20,750
200 1600 21,000
250 1800 21,250
300 1900 21,500
350 1950 21,750

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Solution Preview

Please refer attached file for better clarity of tables and formulas.
Solution 1

Number Of Workers Output Average Product of labor Marginal Product of labor
0 0
1 50 50.0 50.0
2 110 55.0 60.0
3 300 100.0 190.0
4 450 112.5 150.0
5 590 118.0 140.0
6 665 110.8 ...

Solution Summary

Solution describes the steps and formulas for calculating maginal product, average product, variable cost, total cost, average variable cost and average total costs based upon given information.

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Cost table with graphs using excel

Using the following demand schedule, calculate total revenue, marginal revenue and own-price elasticity of demand. Then show the relation among marginal revenue, price and elasticity of demand.
Quantity Marginal Elasticity
Price Demanded Revenue Of Demand
$60 8
50 16
40 24
30 32
20 40
10 48

-------------------------------------------------------
The first two columns in the following table give a firm's short run production function when the only variable input is labor, and capital (the fixed input) is held constant at 5 units. The price of capital is $2,000 per unit, and the price on labor is $500 per unit.

Units Units COST
of of Average Marginal Fixed Variable Total
Labor Output product product
0 0
20 4,000
40 10,000
60 15,000
80 19,400
100 23,000

AVERAGE COST Marginal
Fixed Variable Total cost

a. Complete the table
b. What is the relation between average variable cost and marginal cost? Between erage total cost and marginal cost?
c. What is the relation between average product and average variable cost? Between marginal product and marginal cost?

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