To answer these questions, we need to understand the concepts of marginal cost, average variable cost, output, and average total cost. Let's break down the calculation for each question:
a. Marginal cost (MC) represents the additional cost incurred when producing one more unit of output. To calculate marginal cost, we need to determine the change in total cost when producing one more unit of output.
In this scenario, we are given that the last worker added 10 units to total output. Therefore, to find marginal cost, we divide the change in total cost by the change in total output:
Marginal Cost = Change in Total Cost / Change in Total Output
b. Average variable cost (AVC) refers to the variable cost per unit of output. To calculate average variable cost, we divide the total variable cost by the total output:
Average Variable Cost = Total Variable Cost / Total Output
c. The output produced by the firm can be determined by the average physical product of labor. In this scenario, it is given that the average physical product of labor is 25 units. This means that, on average, each worker produces 25 units of output.
d. Average total cost (ATC) represents the total cost per unit of output. To calculate average total cost, we divide the sum of total fixed cost (TFC) and total variable cost (TVC) by the total output:
Average Total Cost = (Total Fixed Cost + Total Variable Cost) / Total Output
e. To determine if average variable cost is increasing, decreasing, or constant, we need additional information or data points indicating cost changes at different levels of output.
Now, let's plug in the given information and perform the calculations to find the answers to these questions.