Nimbus Ltd. makes brooms and then sells them door to door. Here is the relationship between the number of workers and Nimbus’s output in a given day: Average Total Cost 3 6 Output 0 1 30 2 70 120 4 5 160 190 7 210 220 Marginal Product Total Cost Marginal Cost a. Calculate and fill in the column of marginal products. What pattern do you see? How might you explain it? Hints: show your calculations. b. A worker costs $150 per day, and the firm has fixed costs of $300. Use this information to calculate and fill in the column for total cost. Hints: show your calculations. c. Calculate and fill in the column for average total cost. (Recall that ATC=TC/Q.) What pattern do you see? Hints: show your calculations.
Nimbus Ltd. makes brooms and then sells them door to door. Here is the relationship between the number of workers and Nimbus’s output in a given day:
3
6
Output
0
1
30
2
70
120
4
5
160
190
7
210
220
Marginal Product
Total Cost
Marginal Cost
a. Calculate and fill in the column of marginal products. What pattern do you see? How might you explain it? Hints: show your calculations.
b. A worker costs $150 per day, and the firm has fixed costs of $300. Use this information to calculate and fill in the column for total cost. Hints: show your calculations.
c. Calculate and fill in the column for average total cost. (Recall that ATC=TC/Q.) What pattern do you see? Hints: show your calculations.
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