a. If the total product curve first increases at an increasing rate (i.e., it faces up) and then

increases at a decreasing rate (i.e., it faces down),

i.What is the shape of the corresponding average product and marginal product curves?

ii.What is the relationship between average product and marginal product?

iii.What is the relationship between the above total product curve and the total cost curve?

(3 marks)

b.Given the following total revenue and total cost functions of a firm:

TR = 22Q - 0.5Q²

TC = 1/3 Q³ - 8.5Q²+ 50Q + 90

Determine:

i.The level of output at which the firm maximises its total profit. (2 marks)

ii.The maximum profit that the firm could earn. (2 marks)