n this module you learned that cost functions are derived from production functions and that the marginal cost curve is the inverse of the marginal product curve. Work through this problem to demonstrate those findings. HINT: Don't forget you can graph starting with zero.

Production Function:

Total Product (Q)	0	1	2	3	4	5
Labor (L)	0	1	3	6	10	15
Marginal Product (MP)
Variable Costs (VC)
Fixed Costs (FC)	0	100
Total Costs (TC)
Marginal Costs (MC)

1. Using the production function, compute marginal product using the definition given earlier in this module.

Now, suppose this firm can hire workers at a wage rate of $10 per hour to work in its factory which has a rental cost of $100 starting with the first unit produced. Use the production function to derive the cost function.

2. Compute the variable cost for Quantities 0 through 5.

3. Compute the fixed cost for Quantities 0 through 5.

4. Compute the total cost for Quantities 0 through 5. (This is the cost function.)

5. Compute the marginal cost for Quantities 0 through 5.

6. Draw a graph of the marginal product curve using the numbers you computed.

7. Draw the marginal cost curve and compare it to the marginal product curve above. Explain what you see.