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Q. Suppose that a firm's only variable input is labour. When 50 workers are used, average product of labour is 50 and marginal product of labour is 75. Wage rate is $80 and total cost of fixed input is $500.

a. Illustrate what is average variable cost? Explain how your calculations.

b. Illustrate what is marginal cost? Explain how your calculations.

c. Illustrate what is average total cost? Explain how your calculations.

d. Is each of following statements true or false?

Explain your answer.

1. Marginal cost is increasing.

2. Average Variable cost is increasing.

3. Average total cost is decreasing.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9306416

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