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Suppose Ben is starting a grocery delivery company, which takes grocery orders from customers, goes to the grocery store, buys the groceries, and delivers them
Suppose Ben is starting a grocery delivery company, which takes grocery orders from customers, goes to the grocery store, buys the groceries, and delivers them to the customers' homes. Employees will receive orders from customers on a cell phone, for which the company pays $10 per day for service. To make deliveries to customers, he will rent a delivery van which seats two people for $50/day. He plans on hiring between 1 and 6 employees to take the orders, do the grocery shopping, and make the deliveries. He will pay each worker $90 in wages per day. The following is the business' production function. Marginal Variable Product Cost Total Average Average Marginal Cost Variable Total Cost l-'l' 0001 n l- .- |_\\ UJ |_\\ LO 1. Find the marginal product of labor and enter it into the third column of the table. Where is the point of diminishing returns? Explain the conditions that would lead to diminishing returns for this business. There's an old saying \"the more the merrier,\" but is this always the case? Can you think of a scenario in which too much labor would decrease output? 2. Identify xed and variable costs. 3. Complete the table by nding variable cost, total cost, marginal cost, average variable cost, and marginal cost for each level ofoutput. You are welcome to add additional columns to the table if you would nd it helpful. 4. Explain how marginal cost inuences average variable and average total cost. 5. If Ben charges $30 per delivery, will he earn prot? How can you tell
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