At what level of output and labor input are concession stand profits maximized? What are two ways you could tell if this was correct from the table data? How are average total cost and marginal cost related to marginal product and average product? What do you notice about marginal revenue and the price of output (average price of concession stand items in this case)?
|
Output (Concession Stand Items) |
Number of Workers Employed Per Day |
|
Total Variable Cost of Labor |
Total Fixed Costs Per Day |
Total Cost Per Day |
Average Price of Concession Stand Items |
Total Revenue |
Profit |
|
Average Fixed Cost |
Average Total Cost |
Marginal Cost |
Marginal Revenue |
|
0 |
0 |
$120 |
0 |
$2,000 |
2000 |
$8.00 |
0 |
-2000 |
0 |
0 |
0 |
0 |
8 |
|
100 |
2 |
$120 |
240 |
$2,000 |
2240 |
$8.00 |
800 |
-1640 |
2.40 |
20 |
22.40 |
2.40 |
8 |
|
400 |
4 |
$120 |
480 |
$2,000 |
2480 |
$8.00 |
3200 |
720 |
1.20 |
5 |
6.20 |
0.80 |
8 |
|
750 |
6 |
$120 |
720 |
$2,000 |
2720 |
$8.00 |
6000 |
3280 |
0.96 |
2.66 |
3.62 |
0.67 |
8 |
|
900 |
8 |
$120 |
960 |
$2,000 |
2960 |
$8.00 |
7200 |
4240 |
1.07 |
2.22 |
3.29 |
1.60 |
8 |
|
1,025 |
10 |
$120 |
1200 |
$2,000 |
3200 |
$8.00 |
8200 |
5000 |
1.17 |
1.95 |
3.12 |
1.92 |
8 |
|
1,125 |
12 |
$120 |
1440 |
$2,000 |
3440 |
$8.00 |
9000 |
5560 |
1.28 |
1.77 |
3.06 |
2.40 |
8 |
|
1,200 |
14 |
$120 |
1680 |
$2,000 |
3680 |
$8.00 |
9600 |
5920 |
1.40 |
1.66 |
3.07 |
3.20 |
8 |
|
1,250 |
16 |
$120 |
1920 |
$2,000 |
3920 |
$8.00 |
10000 |
6080 |
1.54 |
1.60 |
3.14 |
4.80 |
8 |
|
1,280 |
18 |
$120 |
2160 |
$2,000 |
4160 |
$8.00 |
10240 |
6080 |
1.69 |
1.56 |
3.25 |
8 |
8 |
|
1,290 |
20 |
$120 |
2400 |
$2,000 |
4400 |
$8.00 |
10320 |
5920 |
1.86 |
1.55 |
3.41 |
24 |
8 |
|
1,289 |
22 |
$120 |
2640 |
$2,000 |
4640 |
$8.00 |
10312 |
5672 |
2.05 |
1.55 |
3.60 |
-240 |
8 |
|
1,280 |
24 |
$120 |
2880 |
$2,000 |
4880 |
$8.00 |
10240 |
5360 |
1.78 |
1.56 |
3.81 |
-26.67 |
8 |
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Use this chart to answer the following questions:
At what level of output and labor input are concession stand profits maximized? What are two ways you could tell if this was correct from the table data?
How are average total cost and marginal cost related to marginal product and average product?
What do you notice about marginal revenue and the price of output (average price of concession stand items in this case)?
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