The production function for a firm is: q=-0.6L3+18L2K+10L where q is the amount of output, L is the number of labor hours per week, and K is the amount of capital. The wage is w = $100 and the rental rate is r = $800 per time period. aUsing Excel, calculate the total short-run output, q(L), for L = 0, 1, 2, …, 20, given that capital is fixed in the short run and K = 1. Also calculate the average product of labor; APL, and the marginal product of labor, MPL. bFor each quantity of labor in (a), calculate the variable cost, VC; the total cost, C; the average variable cost, AVC; the average cost , AC; and the marginal cost, MC. Using excel, draw the AVC, AC, and MC curves in a diagram. Hint: you will not be able to solve the total product curve for L as a function of output. So, instead construct a table, See the headings. Use this definition ΔTC/Δq qLMPLAPLTVCTFCTCMCAVCAFCATCrwStartStep0 011 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Production function q = -0.6L3+18L2K+10L In short-run, the capital K is fixed at K=1 So short-run…

Answered: The production function for a firm is:…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 3MC

See similar textbooks

Related questions

Question

The production function for a firm is:

q=-0.6L³+18L²K+10L where q is the amount of output, L is the number of labor hours per week, and K is the amount of capital. The wage is w = $100 and the rental rate is r = $800 per time period.

Using Excel, calculate the total short-run output, q(L), for L = 0, 1, 2, …, 20, given that capital is fixed in the short run and K = 1. Also calculate the average product of labor; APL, and the marginal product of labor, MPL.

For each quantity of labor in (a), calculate the variable cost, VC; the total cost, C; the average variable cost, AVC; the average cost , AC; and the marginal cost, MC. Using excel, draw the AVC, AC, and MC curves in a diagram.

Hint: you will not be able to solve the total product curve for L as a function of output. So, instead construct a table, See the headings.

							Use this definition
							ΔTC/Δq
q	L	MPL	APL	TVC	TFC	TC	MC	AVC	AFC	ATC	r	w	Start	Step
0													0	1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

What are the excel formulas used?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Recommended textbooks for you

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning