all T-Mobile Wi-Fi 1:19 PM * 58% 1. J0°s (or Josh and Charte\'s) Dead by Dawn is

Question

all T-Mobile Wi-Fi 1:19 PM * 58% 1. J0°s (or Josh and Charte's) Dead by Dawn is an extieme frieving the be phsi fitness center JC 's either achieving whichever comes first. condition of their lives or premature expiration elationship between the number of trainers JCs employs and the number of people trained each day is listed in the table below. Number of MarginalTotalAvergeMarl 1s s0 65 75 83 A) Complete the marginal product column. What patten do you see? Explain what you see B) Each trainer is paid $400 a day. Also, JC's has fixed cost of $3,000 per day. Use this information to complete the column for total cost C) Complete the column for average total cost. What pattern do you see?

Explanation / Answer

The table is completed below

a) Marginal product is the additional product for one additional unit of labor. Here we see that Marginal product is falling showing diminishing marginal returns

b) Total cost is composed of FC = 3000 and VC = 400*Labor unit.

c) ATC is computed as TC/Q. ATC falls and then rises making a U-shape.

d) Marginal cost is the additional cost when one more unit of output is sold. It is computed as change in TC / change in Q. MC is also U-shaped

e) MP and MC shows inverse relationship. When MP rises, MC falls and when MP falls, MC rises. This implies MP is Inverse U shaped and MC is U-shaped

f) When MC > ATC. ATC is rising. When MC < ATC, ATC falls. When MC = ATC, ATC is minimum.

Number of trainers Output Marginal product Total cost Average total cost Marginal cost 0 0 3000 1 15 15 3400 226.67 26.67 2 30 15 3800 126.67 26.67 3 50 20 4200 84.00 20.00 4 65 15 4600 70.77 26.67 5 75 10 5000 66.67 40.00 6 80 5 5400 67.50 80.00 7 83 3 5800 69.88 133.33

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