1. Castle Rock Construction Company has the following short-run cost and output values for a given day:

Labor.............output...........TFC.....TVC...........TC..............MC.........AFC...........AVC............ATC

(L) (Units/day)

0.........................0

1........................10

2........................22

3........................36

4........................48

5........................58

6........................66

7........................70

8........................72

Additional information:

The total fixed cost (TFC) for this firm is $100 per day. The only total variable cost (TVC) is wages, which is $60 per person per day.

1. Calculate TFC, TVC, TC, MC, AFC, AVC and ATC for L=2 and L=3. Please write your answers below.

1. For what worker hired does diminishing returns begin?

1. How many workers should be hired to minimize Average Variable Cost?