Question

Graphically illustrate her total, marginal and average product curves as well as her marginal and average variable cost curves. Show where the inflection point lies, where production is maximized and what number of workers corresponds to the highest average and marginal product as well as the lowest average variable and marginal cost.TPL - Total Product LaborMPL - Marginal Product LaborAPL - Average Product LaborFC - Fixed CostVC - Variable CostTC - Total CostAFC - Average Fixed CostAVC - Average Variable CostATC - Average Total CostMC - Marginal Cost

Answer 1

Inflection point occurs where increasing total product curve intersects 45 degree line

Step-by-step explanation:

he marginal product of a factor will change at different levels of employment of the factor. It has been found that marginal product of a factor rises in the beginning and then ultimately falls as more of it is used for production, other factors remaining the same.

That is why in Fig. 16.2 mar­ginal product (MP) of labour as measured by the slopes of the tangents drawn to the total product curve TP at various points has been shown to be rising in the beginning and then diminishing till it becomes zero at the maximum point G of the total product curve.

Thereafter, the marginal product of labour becomes negative. The relationship between average product and marginal product and how both of them are related to the total product will be explained in detail in our analysis of the law of variable proportions.

the same rule for profit maximisation still applies. The firm maximises profit where MR=MC (at Q1).

For a firm in perfect competition, demand is perfectly elastic, therefore MR=AR=D.

This gives a firm normal profit because at Q1, AR=AC.

All the graphs are attached in picture form with the answer