Question

Average: /2 4. Problems and Applications 04 2023-21 Nimbus, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus's output in a se Inform given day: Page Herel In the following table, complete the marginal product column. nfo Workers Output Marginal Product Total CostMarginal Cost Avge Total Cost e Quest 70 120 4 165 5 200 6 220 7 230 ig ed Ass and Re A worker costs $120 a day, and the firm has fixed costs of $180. Use this information to fill in the column for total cost in the previous table. inking Messa Fill n the column for marginal cost in the previous table. (xtint: M des Fill in the column for average total cost in the previous table. (Hint: ATC )

Answer 1

Workers	Output	Marginal product	Variable cost	Fixed cost	Total cost	Marginal cost	Average total cost
0	0	-	120(0)=0	180	(0+180)=180	-	-
1	30	30	120(1)=120	180	(120+180)=300	(300-180)/(30) = 4	(300/30)=10
2	70	40	(120)(2)=240	180	(240+180)=420	(420-300)/(70-30) =3	(420/70)=6
3	120	50	(120)(3)=360	180	(360+180)=540	(540-420)/(120-70) = 2.4	(540/120)=4.5
4	165	45	(120)(4)=480	180	(480+180)=660	(660-540)/(165-120)= 2.67	(660/165)= 4
5	200	35	(120)(5)=600	180	(600+180)=780	(780-660)/(200-165)= 3.43	(780/200)=3.9
6	220	20	(120)(6)=720	180	(720+180)=900	(900-780)/(220-200)= 6	(900/220)=4.09
7	230	10	(120)(7)=840	180	(840+180)=1020	(1020-900)/(230-220)= 12	(1020/230)=4.43

When marginal product is rising , marginal cost is falling. (As we can see from the above table).

When marginal cost is greater than average total cost , average total cost is rising. (As we can see from the above table).

Average total cost is U-shaped . (Earlier ATC is falling and then rising as pattern of ATC in table).

Hence, statement (A),(C), (D) are correct.

Statement (B) is not true because marginal cost is falling first and then rising.