Using the following demand schedule, calculate total revenue, marginal revenue and own-price elasticity of demand. Then show the relation among marginal revenue, price and elasticity of demand.
Quantity Marginal Elasticity
Price Demanded Revenue Of Demand
$60 8
50 16
40 24
30 32
20 40
10 48
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The first two columns in the following table give a firm's short run production function when the only variable input is labor, and capital (the fixed input) is held constant at 5 units. The price of capital is $2,000 per unit, and the price on labor is $500 per unit.
Units Units COST
of of Average Marginal Fixed Variable Total
Labor Output product product
0 0
20 4,000
40 10,000
60 15,000
80 19,400
100 23,000
AVERAGE COST Marginal
Fixed Variable Total cost
a. Complete the table
b. What is the relation between average variable cost and marginal cost? Between erage total cost and marginal cost?
c. What is the relation between average product and average variable cost? Between marginal product and marginal cost?