I need to know how to answer this question. please solve it and explain clearly

Question

I need to know how to answer this question. please solve it and explain clearly how did you do that.

1. (25 points) Iggy's Ice Cream Shack sells ice cream. The quantity of output (pounds of ice cream scooped per day) and the corresponding number of workers per day are in the following table: MPL TC MC ATC AVC (workers/day) (bs of ice (lbs/worker/ (S) cream/day) (S/lb) (S/lb) (S/lb) 1 3 4 5 6 3 9 14 16 17.5 18 The Shack is a profit maximizing firm in a perfectly competitive market, and a worker earns $30 per day. Fixed costs come from a 1-year contract for rents paid on the freezers, and are $100 per day. a. (8 points) In the table above, find the MPL, TC, MC, ATC and AVC. No need to show your work

Explanation / Answer

MPL= This is the extra output generated by an extra worker. Therefore, the marginal product of the first worker will be 3 units. The second worker adds an extra 9-3 units= 6 units and so on.

TFC =$100 per day.

TVC= cost involved in producing more units, which in this case is the cost of employing workers. Therefore, for 2 workers the TVC should be (2x$ 30) $60.

TC= TVC+TFC.

MC= CHANGE IN TC DIVIDED BY CHANGE IN TOTAL QUANTITY.

ATC= TC/Q

AVC= TVC/Q.

L Q MPL TVC TFC TC MC ATC AVC 1 3 3 30 100 130 -- 43.33 10 2 9 6 60 100 160 20 17.77 6.60 3 14 5 90 100 190 6 13.57 6.42 4 16 2 120 100 220 15 13.75 7.5 5 17.5 1.5 150 100 250 20 14.28 8.57 6 18 1 180 100 280 30 15.55 10

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