Hello,

I need help answering question G only. Thank you.

Suppose that a firm is currently employing 20 workers, the only variable input, at a wage rate of $60. The average product of labor is 30, the last worker added 12 units to total output, and total fixed cost is $3,600.

a)What is the firm's marginal cost at the current level of output?

Answer: Marginal cost is $60

b) What is the firm's average variable cost at the current level of output?

Answer: The average variable cost is $2

c)How much output is being produced?

Answer: Output is 600 units

d) What is the firm's average total cost at the current level of output?

Answer: Average total cost (ATC) is 8

e) Is average variable cost increasing, constant, or decreasing?

Answer: The AVC is increasing from 1.9 to 2

f) Is average total cost increasing, constant or decreasing?

Answer: The ATC is decreasing from 8.1 to 8

g) Consider that the market price is $7.00. Is the firm currently producing at its profit-maximizing level of output? If yes, state that the current level of output is profit-maximizing and recommend that the firm should not change its current level of output. If no, then state that the current level of output is not profit-maximizing and recommend whether the firm should increase or decrease its level of output.