Compute and make the new graph of marginal cost if workers

Reference no: EM13393120

Helen makes cheesecakes using equipment that she rents for $30 and cheese and butter that cost $4.55 a cake. She hires workers and finds that they produce according to the following schedule:

Cheesecakes	Total hours
1	0.1
2	0.25
3	0.475
4	0.8125
5	1.31875
6	2.078125
7	3.217188
8	4.925781

Workers are paid $10/hour.

a. Using a spreadsheet, calculate and graph the marginal cost of each cheesecake. Why does the MC curve have the slope (up, down, or flat) that it does?

b. Calculate and make a new graph giving the marginal cost of each cheesecake if workers become 25% more productive, that is to say, if each cake can be made with only 75% as much labor. Calculate and make a new graph of the marginal cost if workers get a raise to $15/hour, with the old productivity.

Reference no: EM13393120

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