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Author Question: A bakery that produces 100 loaves of bread has a variable cost of 50 and a fixed cost of 200. ... (Read 119 times)

misspop

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on: Jun 29, 2018
A bakery that produces 100 loaves of bread has a variable cost of 50 and a fixed cost of 200. Calculate the total cost, average total cost, average variable cost, and average fixed cost of the bakery.
 
  What will be an ideal response?

Question 2

Is it possible for an input to have a negative marginal product?
 
  What will be an ideal response?


jrpg123456

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The total cost that the bakery incurs = 50 + 200 = 250.
The average total cost of the bakery = 250/100 = 2.50.
The average variable cost of the bakery = 50/100 = 0.50.
The average fixed cost of the bakery = 200/100 = 2.

Answer to Question 2

Yes, sometimes if a variable input is continued to be acquired even after the stage of diminishing returns, it can actually lead to a fall in total output. Hence, it is possible for an input to have a negative marginal product.


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