The table below shows how much output a firm is able to produce depending on how...
The table below shows how much output a firm is able to produce depending on how many resources it uses. The selling price for the output is $5 per unit, the cost of labor is $40 per unit, and the cost of capital is $15 per unit.
|
Labor |
Output |
Capital |
MPL |
Total Revenue |
VMPL |
|
0 |
0 |
3 |
|||
|
1 |
24 |
3 |
|||
|
2 |
44 |
3 |
|||
|
3 |
60 |
3 |
|||
|
4 |
72 |
3 |
|||
|
5 |
80 |
3 |
|||
|
6 |
84 |
3 |
Homework Answers
Answer
the marginal product of n th worker =total output of n workers -
the total output of n-1 workers
MPL(n)=TP(n)-TP(n-1)
MPL(1)=24-0=24
MPL(2)=44-24=20 and so on
=========
Total revenue =P*Q=output * price=5Q
TR(0)=0*5=0
TR(24)=24*5=120 and so on
===========
VMPL=MPL*Price
VMPL(1)=24*5=120
VMPL(2)=20*5=100 and so on
=============
| Labor | Output | Capital | MPL | Total Revenue | VMPL |
| 0 | 0 | 3 | 0 | ||
| 1 | 24 | 3 | 24 | 120 | 120 |
| 2 | 44 | 3 | 20 | 220 | 100 |
| 3 | 60 | 3 | 16 | 300 | 80 |
| 4 | 72 | 3 | 12 | 360 | 60 |
| 5 | 80 | 3 | 8 | 400 | 40 |
| 6 | 84 | 3 | 4 | 420 | 20 |
| 6 | 84 | 3 | 0 | 420 | 0 |
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