Assignment #1 three stages of production (excel solution)
TimeAssignment 1
Complete the table (Table 1) below, then draw the following curves:
- Short-run average product (AP) curve;
- Short-run marginal product (MP) curve.
Table showing the Average and Marginal product of labour for a hypothetical firm
Amount of labour( units) | Amount of capital(No. of machines) | Output of parts(Q, hundreds of parts) | Average product (Q/L) | Marginal product(∆Q/∆L) |
0 | 5 | 0 | - | - |
1 | 5 | 49 | 49 | 49 |
2 | 5 | 132 | 66 | 83 |
3 | 5 | 243 | 81 | ** |
4 | 5 | 376 | 94 | 133 |
5 | 5 | 525 | ** | 149 |
6 | 5 | 684 | 114 | 159 |
6.666 | 5 | 792.59 | 120.09 | *** |
7 | 5 | 847 | **** | 163 |
8 | 5 | 1008 | 126 | 161 |
9 | 5 | 1161 | **** | *** |
10 | 5 | 1300 | 130 | 139 |
11 | 5 | 1419 | *** | 119 |
12 | 5 | 1512 | 126 | 93 |
13 | 5 | 1573 | 121 | **** |
14 | 5 | 1596 | **** | 23 |
15 | 5 | 1575 | 105 | ****** |
Use the information from the completed table and the graphs to identify the three stages of production and explain why the firm’s short run production has only one ‘rational’ stage of production.
13 years ago
Purchase the answer to view it
complete_solution.xls
