Question 1 A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable. Labour (units) 1 2 3 4 5 6 7 8 9 Total Product 8 15 24 30 35 37 38 38 36 (TP) in Units Average Product (AP) in unit Marginal Product (MP) in units Italic a) Fill in the values of AP and MP. b ) Sketch TP, AP and MP in one diagram. Identify the stages of production in the diagram. Explain why the firm still hire labour even though it is in the range of diminishing returns?. What is the number of workers after which diminishing marginal returns starts?. f) Is this a short run or long run phenomenon? Question 2 The table below shows the average cost (AC) for a purely competitive market. The average revenue + (AR) is constant at RM5 per unit and the firm's total fixed cost (TFC) is RM4. Output Total Revenue Average Cost Total Cost Marginal Cost Marginal (Units) (RM) RM) (RM) (RM) Revenue (RM) 1 8.0 5.5 4.0 3.5 3.8 4.5 7 6.0 a) Fill in the values for total revenue (TR), total cost (TC) and marginal cost (MC) in the column provided Determine the profit maximizing output. Show the equilibrium of the firm in a diagram. d) If the average revenue falls to RM3 per unit, calculate the firm's new profit or loss at the equilibrium. e) Based on your answer in part (d), should the firm continue or stop the production? Justify