Question

Antonio's Big Burger is a small restaurant that sells hamburgers. For Antonio, grills are a fixed input and workers are variable inputs. Assume that labor is Antonio's only variable cost. Antonio has a fixed cost of $80 per day and pays each of his workers $120 per day. Antonio's total product schedule and total cost at each level of labor are presented in the following table.Fill in the blanks to complete the Marginal Physical Product of Labor column for each worker and the Marginal Cost column at each level of labor. When hiring 3 or more workers, Antonio's Big Burger faces _________ marginal returns to labor. Over the range of workers for which the marginal product of labor is decreasing, Antonio's Big Burger faces _____________marginal cost.

Answer 1

Antonio's Big Burger faces DECREASING marginal returns to labor. Over the range of workers for which the marginal product of labor is decreasing, Antonio's Big Burger faces INCREASING marginal cost.

Missing information:

Labor Outpt Total Cost

0 0 80

1 40 200

2 100 320

3 140 440

4 160 560

5 175 680

Return on labor (icnrease in output as workers are added:

We subtract previous outcome at labor - 1 with curernt labor

0

40

60

40

20

15

Marginal Cost

(Wew divide the additional outcome by the difference cost per employee)

3

2

3

6

8

Step-by-step explanation: