Tom leases a farmers field for $120 a day and grows pineapples. He pays students $100 a
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Tom leases a farmer’s field for $120 a day and grows pineapples. He pays students $100 a day each to pick pineapples and he leases capital at $80 a day. Table 1 shows Tom’s daily output.
1. What is Tom’s total cost and average total cost of 300 pineapples a day?
2. What is the marginal cost of picking a pineapple when the quantity increases from 360 to 400 pineapples a day?
3. At what output is Tom’s average total cost a minimum?
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