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    Change in Q/change in L Q/L R K M Q + W L

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    debochen
    This document contains a production function table that shows how output, costs, and productivity change as labor is increased from 0 to 5 units while capital is held fixed at 1000 units. As labor increases, output initially increases at a decreasing rate but average and marginal productivity of labor eventually decline. Total costs rise with increasing output but average total costs remain relatively stable while average fixed costs fall and average variable costs rise slightly with more labor.

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    Change in Q/change in L Q/L R K M Q + W L

    Uploaded by

    debochen
    15 views2 pages
    This document contains a production function table that shows how output, costs, and productivity change as labor is increased from 0 to 5 units while capital is held fixed at 1000 units. As labor increases, output initially increases at a decreasing rate but average and marginal productivity of labor eventually decline. Total costs rise with increasing output but average total costs remain relatively stable while average fixed costs fall and average variable costs rise slightly with more labor.

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    This document contains a production function table that shows how output, costs, and productivity change as labor is increased from 0 to 5 units while capital is held fixed at 1000 units. As labor increases, output initially increases at a decreasing rate but average and marginal productivity of labor eventually decline. Total costs rise with increasing output but average total costs remain relatively stable while average fixed costs fall and average variable costs rise slightly with more labor.

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    © All Rights Reserved
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    15 views2 pages

    Change in Q/change in L Q/L R K M Q + W L

    Uploaded by

    debochen
    This document contains a production function table that shows how output, costs, and productivity change as labor is increased from 0 to 5 units while capital is held fixed at 1000 units. As labor increases, output initially increases at a decreasing rate but average and marginal productivity of labor eventually decline. Total costs rise with increasing output but average total costs remain relatively stable while average fixed costs fall and average variable costs rise slightly with more labor.

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    of 2

    Production Function

    K (fixed)
    w
    material
    price of K "r" (per unit)

    Capital

    25SQRT(K*L)
    1000
    20
    0.5
    250

    Labor

    L
    1000
    1000
    1000
    1000
    1000
    1000

    Output Marginal Average


    (total Product of Product of
    product)
    Labor
    Labor

    Fixed Cost

    Variable
    Cost

    =change in
    q/change in
    L

    =q/L

    =r*K

    =m*q +
    w*L

    MPL

    APL

    q
    0
    1
    2
    3
    4
    5

    0
    790.5694
    1118.034
    1369.306
    1581.139
    1767.767

    790.5694
    327.4646
    251.2724
    211.8324
    186.6281

    790.5694
    559.017
    456.4355
    395.2847
    353.5534

    $
    $
    $
    $
    $
    $

    FC
    250,000.00
    250,000.00
    250,000.00
    250,000.00
    250,000.00
    250,000.00

    VC
    $
    $
    $
    $
    $

    415.28
    599.02
    744.65
    870.57
    983.88

    Total Cost

    $
    $
    $
    $
    $
    $

    TC
    250,000.00
    250,415.28
    250,599.02
    250,744.65
    250,870.57
    250,983.88

    Average
    Marginal Average
    Average
    Variable
    Cost
    Fixed Cost
    Total Cost
    Cost
    =change in
    TC/ change
    in q

    =FC/q

    =VC/q

    =TC/q

    MC

    AFC

    AVC

    ATC

    $
    $
    $
    $
    $

    0.53
    0.56
    0.58
    0.59
    0.61

    $
    $
    $
    $
    $

    316.23
    223.61
    182.57
    158.11
    141.42

    $
    $
    $
    $
    $

    0.53
    0.54
    0.54
    0.55
    0.56

    $
    $
    $
    $
    $

    316.75
    224.14
    183.12
    158.66
    141.98

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