Nimbus, Inc., makes brooms and then sells
them door-to-door. Here is the relationship
between the number of workers and Nimbus’s
output in a given day:
Average
Marginal Total Total Marginal
Workers Output Product Cost Cost Cost
0 0 ___ ___
___ ___
1 20 ___ ___
___ ___
2 50 ___ ___
___ ___
3 90 ___ ___
___ ___
4 120 ___ ___
___ ___
5 140 ___ ___
___ ___
6 150 ___ ___
___ ___
7 155 ___ ___
a. Fill in the column of marginal products.
What pattern do you see? How might you
explain it?
b. A worker costs $100 a day, and the firm has
fixed costs of $200. Use this information to
fill in the column for total cost.
c. Fill in the column for average total cost.
(Recall that ATC = TC/Q.) What pattern do
you see?
d. Now fill in the column for marginal cost.
(Recall that MC = ∆TC/∆Q.) What pattern do
you see?
e. Compare the column for marginal product
and the column for marginal cost. Explain
the relationship.
f. Compare the column for average total cost
and the column for marginal cost. Explain
the relationship.