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Land Rent = $500.00/acre Labor (L) =$100.00/time period Acres of Land (K) (L) Bushels of Wheat (Q) MP FC VC TC MC AFC AVC 3 0 ATC 0 1.500 3 1 50 50 3 2 125 75 3 3 225 100 3 4 315 90 3 5 385 70 Marginal Product Marginal cost Total Cost MP = ATP/AL = AQ/AL Average Fixed Cost MC = ATC/AQ ferage Variable Cost TC = FC + VC Average Total AFC = FC/Q AVC = VC/Q AT = TC/Q Two Things: Notice that at 0 output total costs are equal to fixed cost. At what point do diminishing marginal returns begin to occur