Why does the marginal product curve have an inverted “U” shape?
2. Using diagrams, explain the relationship between the marginal product curve and
marginal cost curve?
3. What are the three stages of production? At which stage of production should a profit-
maximising firm produce?
4. Fill in the appropriate numbers in the blank spaces, given the following information:
output Total fixed
cost (RM)
Total
variable cost
(RM)
Average
fixed
cost
(RM)
Average
total cost
(RM)
Marginal
cost
(RM)
0 100 0
1 100 20
2 100 50
3 100 60
4 100 65
5 100 70
5. Complete the table below:
Output
Total
Cost
(RM)
Total
variable
cost
(RM)
Total
fixed
cost
(RM)
Average
fixed
cost
(RM)
Average
total
cost
(RM)
Marginal
cost (RM)
0 50
5 160
10 200
20 250
36 330
58 400
72 480
88 580
106 700
130 820
150 980
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