Question

In the following table, complete the marginal product column 

Workers Output Marginal ProductTotal Cost M arginal Cost Average Total Cost OU AWN 

A worker costs $60 a day, and the firm has fixed costs of $120. Use this information to fill in the column for total cost in the previous table. 

Fill in the column for marginal cost in the previous table. 

Fill in the column for average total cost in the previous table. 

Which of the following statements are true about the patterns found in this table? Check all that apply. When marginal product is rising, marginal cost is also rising

Consider the following table of long-run total costs for three different firms:

Indicate whether each firm experiences economies of scale or diseconomies of scale. (Note: If a firm experiences economies of scale in one region and diseconomies of scale in another, make sure to select both columns.)

Answer 1

Refer the attached picture for the table. Formula is already mentioned in the question using which we have to fill in the blanks. Refer the table below

MPL MC ATC $ $ $ $ $ $ $ $ 15 25 35 45 30 15 5 TC 120 180 240 300 360 420 480 540 120 150 165 170 $ 4.00 $ 2.40 $ 1.71 $ 1.33 $ 2.00 $ 4.00 $ 12.00 $ 12.00 $ 6.00 $ 4.00 $ 3.00 $ 2.80 $ 2.91 $ 3.18

All the statements are not visible. Only one statement is visible that is

When marginal product is rising, marginal cost is also rising.

This is not true. Refer the table above. When MPL increases the efficiency increases hence MC must decrease.

3. First we are required to calculate the ATC of all the firms. Refer the table below

Firma Firm B Firm C QTCATCTCATCTC ATC 1 $ 60 $ 60.00 $ 11 $ 11.00 $ 21 $ 21.00 2 $ 70 $ 35.00 $ 24 $ 12.00 $ 34 $ 17.00 3 $ 80 $ 26.67 $ 39 $ 13.00 $ 49 $ 16.33 4 $ 90 $ 22.50 $ 56 $ 14.00 $ 66 $ 16.50 5 $ 100 $ 20.00 $ 75 $ 15.00 $ 85 $ 17.00 6 $ 110 $ 18.33 $ 96 $ 16.00 $ 106 $ 17.67 7 $ 120 $ 17.14 $ 119 $ 17.00 $ 129 $ 18.43

Firm A has economies of scale as the ATC is decreasing with the increase in output.

Firm B has diseconomies of scale since ATC increases with the increase in output.

Firm C has economies of scale from 1 unit to 3 units of output and after than diseconomies of scale.

	Economies of Scale	Diseconomies of Scale
Firm A	✅
Firm B		✅
Firm C	✅	✅

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