Consider the following table which describes how a firm uses variable labour input to produce output in the short-run. Suppose each worker is paid $32 and each piece of capital is rented for $80. The firms is currently using 7 units of capital. L q 0 0 1 2 2 11 3 29 4 55 5 89 6 132 7 189 8 254 9 327 10 413 11 456 12 472 13 483 Part (a): What level of output should the firm produce at if their goal is to minimize their average variable cost? Part (b): Which level of output should the firm produce at if their goal is to minimize their marginal cost? Part (c): What level of output should the firm produce at if their goal is to minimize their average total cost?
Consider the following table which describes how a firm uses variable labour input to produce output in the short-run. Suppose each worker is paid $32 and each piece of capital is rented for $80. The firms is currently using 7 units of capital. L q 0 0 1 2 2 11 3 29 4 55 5 89 6 132 7 189 8 254 9 327 10 413 11 456 12 472 13 483 Part (a): What level of output should the firm produce at if their goal is to minimize their average variable cost? Part (b): Which level of output should the firm produce at if their goal is to minimize their marginal cost? Part (c): What level of output should the firm produce at if their goal is to minimize their average total cost?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section7.A: Appendix: A Closer Look At Production And Cost
Problem 1AQ
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Transcribed Image Text:Consider the following table which describes how a firm uses variable labour input to produce output in the short-run. Suppose each worker is
paid $32 and each piece of capital is rented for $80. The firms is currently using 7 units of capital.
L
q
0
0
1
2
2
11
3
29
4
55
5
89
6
132
7
189
8
254
9
327
10
413
11
456
12
472
13
483
Part (a): What level of output should the firm produce at if their goal is to minimize their average variable cost?
Part (b): Which level of output should the firm produce at if their goal is to minimize their marginal cost?
Part (c): What level of output should the firm produce at if their goal is to minimize their average total cost?
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