Apply the marginal product and average product to depict the behavior of production in the short-run. Mark the three stages and explain why the first stage of production is the only rational stage for the firm. What is the role of the law of diminishing role? Fixed input Labor (given) Variable input Capital (given) Change in Capital Output Marginal Product of Capital (MPk) Average product of Labor (APk) 2 0 - 0 - - 2 1 1 30 30.0 2 2 1 120 90 2 3 190 103.3 2 4 1 520 130.0 2 5 670 134.0 2 6 1 70 2 7 1 790 50 112.9 2 8 810 101.3 2 9 10 91.1 2 10 1 830 10 2 11 1 710 -120
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
1. Apply the marginal product and average product to depict the behavior of production in the short-run. Mark the three stages and explain why the first stage of production is the only rational stage for the firm. What is the role of the law of diminishing role?
|
Fixed input Labor (given) |
Variable input Capital (given) |
Change in Capital |
Output |
Marginal Product of Capital (MPk) |
Average product of Labor (APk) |
|
2 |
0 |
- |
0 |
- |
- |
|
2 |
1 |
1 |
30 |
30.0 |
|
|
2 |
2 |
1 |
120 |
90 |
|
|
2 |
3 |
190 |
103.3 |
||
|
2 |
4 |
1 |
520 |
130.0 |
|
|
2 |
5 |
670 |
134.0 |
||
|
2 |
6 |
1 |
70 |
||
|
2 |
7 |
1 |
790 |
50 |
112.9 |
|
2 |
8 |
810 |
101.3 |
||
|
2 |
9 |
10 |
91.1 |
||
|
2 |
10 |
1 |
830 |
10 |
|
|
2 |
11 |
1 |
710 |
-120 |
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