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Economics Problem




Question;You are assigned the task of;computing the variable capital and labor costs for Cost Cutters production;level. Below is a table with the capital and labor requirements for ten;different levels of production.;Production Level;Capital;VC$12;Labor;VC$6;TVC;MC;AVC;0;0;1;3;2;6;3;9;4;12;5;15;6;18;7;21;8;24;9;27;10;30;Complete the table and answer the;following;Assuming the price of labor is $6 per unit and the;price of capital is $12 per unit, compute the total variable costs, the;marginal costs, and the average variable costs for the firm.;Using the numbers that you calculated above, explain;the relationship between the marginal cost and average variable cost.;Using the same numbers, explain the "marginal cost" in terms of;additional inputs needed to produce a marginal unit of output.;If the output price was $62, how many units of output;would the firm produce? Explain.


Paper#58047 | Written in 18-Jul-2015

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