Nimbus Inc., Makes brooms and then sells them door to door. Here is the relationship between the number of workers and Nimbus output in a given day.

Average

Marginal total Total marginal

Workers output product cost cost cost

0 0 ____ ____

____ ____

1 20 ____ ____ ___ ____

____ ____

2 50 ____ ____ ____ ____

3 90 ____ ____ ____

4 120 ____ ____ ____ ____

____ ____ ____ ____

5 140 ____ ____ ____

6 150 ____ ____ ____

____

7 155 ____ ____

a. Fill in the column of marginal products.

What patent do you see? How might you explain it?

b. A worker costs $100 that day, and the firm has fixed cost of $200. Use this information to fill in the column the total cost.

c. Fill in the column for average total cost.

(Recall that ATC = TC/Q.) What patent do you see?

D. Now fill in the column for marginal cost.

(Recall that MC=? TC/ ? Q.) What patent do you see?

e. Compare the column for marginal product, and the column for marginal costs. Explain the

Relationship.

f. You are the chief financial officer for a firm that sells digital music players. Your firm has the following average total cost, schedule:

Quantity average total costs

600 players $300

601 301

Your current level of production is 600 devices, all of which have been sold. Someone calls, desperate to buy one of your music players. The caller offers you $550 for it. Should you accept the offer? Why or why not?