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Answer :

Refer to table 7 - 4 , Ans: b) 4th; 5th

Explanation:

Labor per
unit of time
Total OutputMarginal
Product
Average
Product
00----
1252525
2755037.5
317510058.33
42507562.5
53055561

Marginal Product = Change in Total output / change in number of labor

Average product = Total output / Number of labor

Refer to Figure 9- 6, Ans: a) Firm A is earning profits, Firm B is breaking even, and Firm C is suffering losses.

Explanation:

Firm A is earning profit because ATC < Price

Firm B is breaking even because P = MC = ATC

Firm C is suffering losses because ATC > Price

Refer to Figure 11- 2, Ans: e) P= AR = MC

Explanation:

Under perfect competiton , the profit maximization condition is where price equals marginal cost ( P = MC).

P = AR = MR = MC

Refer to Figure 10- 2, Ans: e) greater than zero, but less than Q2

Refer to Figure 7- 1, Ans: d) the firm will reach its capacity.

Explanation:

When MP is zero then TP is maximum . It means the firm is at its full capacity. After this point TP will start to decrease.

Refer to table 7 - 5 , Ans: e) $22

Explanation:

Average total cost = Total Cost / Quantity

So ATC of producing 25 chairs = $550 / 25 = $22

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