A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable.Labour (units)145789Total Product81524303537383836(TP) in UnitsAverageProduct (AP)in unitsMarginalProduct(MP) in unitsa) Fill in the values of AP and MP.b) Sketch TP, AP and MP in one diagram.c) Identify the stages of production in the diagram.d) Explain why the firm still hire labour even though it is in the range of diminishing returns?e) What is the number of workers after which diminishing marginal returns starts?.f) Is this a short run or long run phenomenon?Question 2The table below shows the average cost (AC) for a purely competitive market. The average revenue(AR) is constant at RM5 per unit and the firm's total fixed cost (TFC) is RM4.Output(Units)Average Cost(RM)Marginal Cost(RM)TotalTotal CostMarginalRevenue (RM)Revenue(RM)(RM)8.025.534.043.53.864.576.0a) Fill in the values for total revenue (TR), total cost (TC) and marginal cost (MC) in the columnprovided.b) Determine the profit maximizing output.c) Show the equilibrium of the firm in a diagram.d) If the average revenue falls to RM3 per unit, calculate the firm's new profit or loss at theequilibrium.e) Based on your answer in part (d), should the firm continue or stop the production? Justify. A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable.Labour (units)145789Total Product81524303537383836(TP) in UnitsAverageProduct (AP)in unitsMarginalProduct(MP) in unitsa) Fill in the values of AP and MP.b) Sketch TP, AP and MP in one diagram.c) Identify the stages of production in the diagram.d) Explain why the firm still hire labour even though it is in the range of diminishing returns?e) What is the number of workers after which diminishing marginal returns starts?.f) Is this a short run or long run phenomenon?Question 2The table below shows the average cost (AC) for a purely competitive market. The average revenue(AR) is constant at RM5 per unit and the firm's total fixed cost (TFC) is RM4.Output(Units)Average Cost(RM)Marginal Cost(RM)TotalTotal CostMarginalRevenue (RM)Revenue(RM)(RM)8.025.534.043.53.864.576.0a) Fill in the values for total revenue (TR), total cost (TC) and marginal cost (MC) in the columnprovided.b) Determine the profit maximizing output.c) Show the equilibrium of the firm in a diagram.d) If the average revenue falls to RM3 per unit, calculate the firm's new profit or loss at theequilibrium.e) Based on your answer in part (d), should the firm continue or stop the production? Justify.

A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable. Labour (units) Total Product (TP) in Units 2 3 4. 5 6. 9 8 15 24 30 35 37 38 38 36 Average Product (AP) in units Marginal Product (MP) in units a) Fill in the values of AP and MP. b) Sketch TP, AP and MP in one diagram. c) Identify the stages of production in the diagram. d) Explain why the firm still hire labour even though it is in the range of diminishing returns? e) What is the number of workers after which diminishing marginal returns starts?. f) Is this a short run or long run phenomenon?

A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable. Labour (units) Total Product (TP) in Units 2 3 4. 5 6. 9 8 15 24 30 35 37 38 38 36 Average Product (AP) in units Marginal Product (MP) in units a) Fill in the values of AP and MP. b) Sketch TP, AP and MP in one diagram. c) Identify the stages of production in the diagram. d) Explain why the firm still hire labour even though it is in the range of diminishing returns? e) What is the number of workers after which diminishing marginal returns starts?. f) Is this a short run or long run phenomenon?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 15P

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