In the short run, the workers are variable inputs and the ovens are fixed inputs.
A variable input is a resource or factor of production which can be changed in the short run by a firm as it seeks to change the quantity of output produced. A fixed input is a resource or factor of production which cannot be changed in the short run by a firm as it seeks to change the quantity of output produced.
The marginal product of labor (MPL) is the change in output that results from employing an added unit of labor.
MPL can be calculated as change in total output/ change in labor units.
Labor | Output | MPL | Total Cost |
0 | 0 | 0 | 20+0 =20 |
1 | 60 | 60 | 20+30(1)= 50 |
2 | 100 | 40 | 20+30(2)= 80 |
3 | 130 | 30 | 20+30(3)=110 |
4 | 150 | 20 | 20+30(4)= 140 |
5 | 160 | 10 | 20+30(5)= 170 |
Production function gives the technological relation between quantities of physical inputs and quantities of output of goods. It can derived by plotting output at various levels of labor units.
Total Cost= Fixed Cost + Variable Cost
Here, fixed cost = $20 and variable cost= $30 per worker
Thus Total cost= 20 + 30q where q represents units of labor
The law of diminshing marginal product of labor implies: (a) total output decreases at decreasing rate as you increase the quantity of labor.
2. Inputs and outputs Amy's Performance Pizza is a small restaurant in Dallas that sells gluten-free...
2. Inputs and outputs Dina's Performance Pizza is a small restaurant in Dallas that sells gluten-free pizzas. Dina's very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas. Dina signed a lease obligating her to pay the rent for the two ovens for the next year. Because of this, and because Dina's kitchen cannot fit more than two ovens, Dina cannot change the number of ovens she uses in her production of...
2. Inputs and outputs Tim's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Tim's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Tim signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Tim's kitchen cannot fit more than two ovens, Tim cannot change the number of ovens he uses in his production of...
2. Inputs and outputs Ana's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Ana's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Ana signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Ana's kitchen cannot fit more than three ovens, Ana cannot change the number of ovens she uses in her production of...
Kyoko's Performance Pizza is a small restaurant in Dallas that sells gluten-free pizzas. Kyoko's very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas. Kyoko signed a lease obligating her to pay the rent for the two ovens for the next year. Because of this, and because Kyoko's kitchen cannot fit more than two ovens, Kyoko cannot change the number of ovens she uses in her production of pizzas in the short...
8. Inputs and outputs Clancy's Performance Pizza is a small restaurant in Houston that sells gluten-free pizzas. Clancy's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Clancy signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Clancy's kitchen cannot fit more than three ovens, Clancy cannot change the number of ovens he uses in his production of...
Inputs and outputs Charles's Performance Pizza is a small restaurant in Philadelphia that sells gluten-free pizzas. Charles's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Charles signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Charles's kitchen cannot fit more than three ovens, Charles cannot change the number of ovens he uses in his production of pizzas...
2. Inputs and outputs Raphael's Performance Pizza is a small restaurant in San Diego that sells gluten-free pizzas. Raphael's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Raphael signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Raphael's kitchen cannot fit more than two ovens, Raphael cannot change the number of ovens he uses in his production...
Sam's Performance Pizza is a small restaurant in San Diego that sells gluten-free pizzas. Sam's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Sam signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Sam's kitchen cannot fit more than two ovens, Sam cannot change the number of ovens he uses in his production of pizzas in the...
2. Inputs and outputs Ginny's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Ginny's very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas. Ginny signed a lease obligating her to pay the rent for the two ovens for the next year. Because of this, and because Ginny's kitchen cannot fit more than two ovens, Ginny cannot change the number of ovens she uses in her production of...
2. Inputs and outputs Larry's Performance Plaza is a small restaurant in Philadelphia that sells gluten free pizzas. Larry's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Larry signed a lease obligating him to pay the rent for the three ovens for the next year Hecause of this, and because Lany's kitchen cannot fit more than three ovens, Larry cannot change the number of ovens he uses in his production...