Magnificent Blooms is a florist specializing in floral arrangements for weddings, graduations, and other events.
Magnificent Blooms has a fixed cost associated with space
and equipment of $100 per day. Each worker is paid $50 per
day. The daily production function for Magnificent Blooms is
shown in the accompanying table
a. What is the marginal product, MPL, of the first, second, third, fourth, and fifth workers? What principle explains why the marginal product per worker declines as the number of workers employed increases?
b. What is the marginal cost (MC) of producing each of the
first 5 floral arrangements? The sixth through ninth floral
arrangements? The remaining levels of output? What
principle explains why the marginal cost per floral
arrangement increases as the number of arrangements
increases?