This question examines the relationships between different measures of a firm's costs, including total cost, total fixed cost, and total variable cost. You will use cost data to calculate missing pieces of those data. Randy's Reading Room prints mystery novels for amateur writers. Randy is usually a meticulous bookkeeper, keeping daily cost data. He did, however, fail to complete all of his bookkeeping responsibilities yesterday. Below, you are provided with the incomplete data that Randy managed to record. Task 1: Using the imperfect data that Randy managed to record, identify the missing cost values. Quantity (novels) 0 1 2 3 4 5 Total Cost 1 (dollars) $55 100 175 Total Fixed Cost Total Variable Cost (dollars) (dollars) $55 55 55 $20 95 155

TC = 188 +38Q +4Q² What is the average fixed cost when 18 units are produced? Enter as a value. ROUND TO TWO DECIMAL PLACES.

(A) With P = 20, W = 25 and TFC = 500: Labor Output (Q) (L) 5 10 25 35 50 60 10 25 60 70 80 90 Marginal Physical Product of AVC=VC/Q ATC=TC/Q Labour (MPPL) 2 3 4 2 2 1 Average Physical Cost Product of (TC) (VC) Labour (APPL) 2 2.5 2.4 2 1.6 1.5 MPPL = Change in Q / Change in L APPL=Q/L TC = TFC + VC VC=W* L MC = Change in TC / Change in Q Total Variable Marginal Average Cost Variable 625 750 1125 1835 1750 2000 125 250 625 875 1250 1500 Cost (MC) 15 10 6 10 15 30 Average Total Cost Cost (AVC) (ATC) 12.50 10.00 10.42 12.50 15.63 16.62 62.5 30.00 18.75 26.21 21.88 22.22 Based on this table, answer this: 1. How much output will this firm produce? If the price of output increases to $30, how does your answer change? 2. If the productivity of labor increases by 10% (all else equal), how much more labor will the firm hire? 3. Below what price will this firm decide to produce zero units of output? (i.e. shut down)

Question 22