Answer :
Refer to table 7 - 4 , Ans: b) 4th; 5th
Explanation:
Labor per unit of time | Total Output | Marginal Product | Average Product |
0 | 0 | -- | -- |
1 | 25 | 25 | 25 |
2 | 75 | 50 | 37.5 |
3 | 175 | 100 | 58.33 |
4 | 250 | 75 | 62.5 |
5 | 305 | 55 | 61 |
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