Use these graph to answer the following questions:

(a) Using the above figure describe the relationship between costs and product curves; marginal product and average product; marginal cost and average variable cost
(b) €œOne of the most important relationships between production and cost curves in the short run involves the effect of the law of diminishing marginal product on the marginal cost of production.€ Be sure to talk about the relationship between marginal product and marginal cost and the relationship between average product of labor and average variable cost. What is relationship between maximum productivity and costminimization?

Transcribed Image Text:

500 800 1,100 Panel A Product curves SMC 525 AVC 3.50 23 3.00 .- 2.33 0 3.250 5,600 6600