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Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406

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BuyFindarrow_forward

Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406
Textbook Problem

Give a numerical example to show that as marginal physical product (MPP) rises, marginal cost (MC) falls.

To determine

Illustrate the numerical example for marginal cost (MC) and marginal physical product (MPP).

Explanation

Table–1 shows the value of marginal physical product (MPP) and output.

Marginal cost:

Marginal cost can be calculated using the following formula:

Marginal cost(MC)=(Input costMarginal physical product (MPP))        (5)

Marginal cost:

If the input cost is 10, then marginal cost for input 1 can be calculated using the following formula:

Marginal cost

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