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Question: 6 the relationship between marginal product and marginal cost lorenzos...

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6. The relationship between marginal product and marginal cost Lorenzos Big Burger is a small restaurant at sells hamburgers. For Lorenzo, grills are a fixed input and workers are variable inputs. Assume that labor is Lorenzos only variable cost. Lorenzo has a fixed cost of ss0 per day and pays each of his workers $50 per day Lorenzos total product schedule and total cost at each level of labor are presented in the following table. Ful in the Dlanks to complete the Marginal Physical Product or Labor column for each worker and the Marginai Cost column at each fevel of fabor (Hint: Marginal cost is the change in total cost divided by the change in the quantity of output. You can caiculate it here by dividing the increase in total cost from hiring one more worker by the marginal physical product from hiring one more worker.) Quantity of Labor Quantity of Output Marginal Physical Product of Labor Total Cost Marginal Cost per day)(Burgers per day 25 75 100 110 115 S50 $100 $150 S200 S250 $300 When hiring the first and second workers, Lorenzos Big Burger faces marginal returns to labor Over the range of workers for which the marginal product of labor is decreasing, Lorenzos Big Burger faces marginal cost

6. The relationship between marginal product and marginal cost Lorenzo's Big Burger is a small restaurant that sells hamburgers. For Lorenzo, grills are a fixed input and workers are variable inputs. Assume that labor is Lorenzo's only variable cost. Lorenzo has a fixed cost of $50 per day and pays each of his workers $50 per day. Lorenzo's total product schedule and total cost at each level of labor are presented in the following table. Fill in the blanks to complete the Marginal Physical Product of Labor column for each worker and the Marginal Cost column at each level of labor. (Hint: Marginal cost is the change in total cost divided by the change in the quantity of output. You can calculate it here by dividing the increase in total cost from hiring one more worker by the marginal physical product from hiring one more worker.)

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