Discussion on behavior of profit maximizing firms

Reference no: EM1373730

The number of repairs manufactured by a computer repair shop depends on the number of employees as given follows:

NUMBER OF WORKERS NUMBER OF REPAIRS
(PER WEEK)
0 0
1 8
2 20
3 35
4 45
5 52
6 57
7 60

Suppose that all inputs [office space, telephone, and utilities] other than labor are fixed in the short run.

[A] Add two additional columns to the table and enter the maginal product and average product for each number of workers.
[B] Over what range of labor input are there increasing returns to labor? Diminishing returns to labor? Negative returns to labor?
[C] Over what range of labor input is marginal product greater than average product? What is happenning to average product as employment increases over this range?
[D] Over what range of labor input is marginal product smaller than average product? What is happenning to average product as employment increases over this range?

Reference no: EM1373730

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