Group 2 Raphaeľ's Kids wear (1) (2) (3) (4) (5) (6) (7) (8) (9) Average Average Average Fixed Variable Total Fixed Cost Variable Total Margin • Consider the short-run production of a small firm that makes kids' sweaters. These sweaters are made using a combination of labor and knitting machines. In the short run, the firm has signed a lease to rent one machine. Therefore, in the short run, the firm cannot vary the amount of knitting machines it uses but only the amount of labor it employs. The firm is currently renting one machine for $25 per day. Each worker is also paid $25 per day. 1. Complete the Table 2. Graph and explain the relationship of different cost for each number Labor Output Cost Cost Cost Cost Cost al Cost $25 $0 $25 --- 1 25 50 $6.25 $12.50 $6.25 $6.25 10 50 13 100 15 125 (1) FC, VC, TC. (2) AVC, AFC, AC. (3) MC, AVC, ATC (4) Production function 5 16 150

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