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‘TUTORIAL : Production and Cost in The Short Run
Name ‘VALDY_DEWANGGA
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Bemardo's Bicycle Workshop and Store
‘The Bemados workshop and store produce and sell bicycles from recycled materials. The production schedule fs
attached tothe table below. Bernado's has a small shop with four machines for converting recycled materials into
steel for bicycle frames and rubber for tres. Bemardo hire ten labor, paint, chairs and cables in its production
process.
Total of
‘Number of Production
‘Labor (units ina
month)
0 0
1 200
2 500
3 700
4 800
5 850
6 875
7 890
8 900
‘a. What are the fixed inputs in the production of Bemado's Recycled Bicycles? And what are the input
variables?
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. Using the folowing tables and diagrams, calculate the value of marginal product and the total product
planning and marginal product curve.
# of labors Total Product wp
0 0 2
1 200
2 500
3 700
4 800
5 850
6 875
7 890
8 900
Bicycle per month
1000
900
800
700
600
500 T
400
300
200
100
fot labor
c. What was the marginal product of Bemnado's first labor force? Calculate the marginal product, MPL, of
‘each worker? What principle causes the marginal product (MP) to decrease when there is an increase
in the number of workers?
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Using the production function for Bemado's Recycle Bike Shop, which has fixed onsls of $ 2.000 and variable.
‘pasts of $ 400 per labor. Calculate the relevant costs for Bemardo in this following table.
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2 500
3 700
4 800
5 850
6 Ga
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. Calculate total costs in the first column and average tolal costs, average fixed costs, average variable
‘costs and marginal costs in the second column. After fished, create curves of AFC, AVC, ATC and MC
in the graph plot below
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