Calculate a new set of figures for each of the columns

Reference no: EM133665906

Problem: Marginal cost can be found by using the formula MC = TC/TPP. In other words, it is the extra cost of producing one more unit. Thus when the firm employs a fifth worker, for example, its costs have gone up (TC) by $100 (i.e. the cost of the fifth worker). Its output has increased (TPP) by 60 units (from 500 to 560). Thus if it is costing the firm an extra $100 to produce an extra 60 units, it is costing it $100/60 = $1.67 to produce one more unit. Draw a graph showing the AFC, AVC, AC and MC curves corresponding to the figures in the above table. Calculate a new set of figures for each of the columns (4)-(10) if (I) the price of capital rose from $60 to $100; (II) the wage rate rose from $100 to $150. Why in the case of (I) is the marginal cost not altered?

Reference no: EM133665906

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