Use the following Information on a hypothetical short-run production function to answer questions a-c.
Units of Labour/Day
|
5
|
6
|
7
|
8
|
9
|
Units of Output/Day
|
120
|
140
|
155
|
165
|
163
|
The price of labour is $20 per day. Ten units of capital are used each day. Regardless of output level. The price of capital is $50 per unit.
a. Calculate the marginal and average variable product of each unit of labour input.
b. Calculate total, average total, average variable, and marginal cost
c. Where diminishing marginal returns sets?