The table below shows the total daily output for a firm producing specialty cakes and operating with a fixed amount of capital. The cost of labour is $100 per unit per day and the fixed cost of the capital is $1000 per day.

a. Using the information provided, compute all of the short-run costs for this firm and complete the table. Remember to record the marginal costs between the rows indicating total cost.b. Assuming that labour is only hired in increments of 10 units, what is this firm’s capacity level of output?c. At what level of labour employed per day does the firm encounter diminishing marginal productivity of labour?

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Units of Total Labour Output (per day) (per day) TFC TVC TC MC AFC AVC ATC 10 100 20 300 30 900 40 1320 50 1500 60 1620 70 1680