A firm uses the inputs of Iron and labor to produce Cars. Suppose that the quantity of labor is fixed. The quantity of Iron and the number of Cars produced is given by the following table: Tons of Iron per weekNumber of Cars per week00105020100301704022050250602607025080200 What is the average product of Iron when 40 tons are used? What is the marginal product of the 60th ton Iron?Does this production function exhibit diminishing marginal returns? If so, at what quantity of Iron do they start to occur?

Marginal product is the amount by which production of a commodity changes from employing more unit…

Answered: A firm uses the inputs of Iron and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm uses the inputs of Iron and labor to produce Cars. Suppose that the quantity of labor is fixed. The quantity of Iron and the number of Cars produced is given by the following table:

Tons of Iron per week	Number of Cars per week
0	0
10	50
20	100
30	170
40	220
50	250
60	260
70	250
80	200

What is the average product of Iron when 40 tons are used?
What is the marginal product of the 60th ton Iron?
Does this production function exhibit diminishing marginal returns? If so, at what quantity of Iron do they start to occur?

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