Question

Questions 12-17. The table below gives the short-run total product values for a lab that has daily fixed costs of $500. Each lab technician is paid $400 per day. Number of lab technicians Tests conducted per day 130 165 195 220 00 235 245 10 250 Using the above information, answer the following questions: 12. What is the marginal product of the 7 lab technician? 13. What is the total variable cost with 9 lab technicians? 14. What is the total fixed cost

Answer 1

Ans:

Marginal product = change in output / change in input

Variable cost = number of lab technicians * $400

Total cost = variable cost + fixed cost

Average cost = Total cost / test conducted

Table showing variable cost,fixed cost and average cost

Number of lab technicians	Test conducted per day	Variable cost	Fixed cost	Total cost	Average cost
1	20	$400	$500	$900	$45
2	50	$800	$500	$1300	$26
3	90	$1200	$500	$1700	$18.89
4	130	$1600	$500	$2100	$16.15
5	165	$2000	$500	$2500	$15.15
6	195	$2400	$500	$2900	$14.87
7	220	$2600	$500	$3100	$14.09
8	235	$3000	$500	$3500	$14.89
9	245	$3400	$500	$3900	$15.92
10	250	$3800	$500	$4300	$17.2

12)

Marginal product of the 7th lab technician = (220 - 195) / (7-6)

= 25 / 1

= 25

13)

Total variable cost with 9 lab technicians = $3400

14)

Total fixed cost with 4 lab technicians = $500

15)

Total cost with 8 lab technicians = $3500

16)

Number of lab technicians that minimizes average total costs = 7

17)

Average total cost = $14.09