<p>MP = Change in output / Change in input
For the first product MP1 = 1 / 500
For the second MP2 = 1 / 600
Hence, the MP is decreasing.</p>

<p>Hope this helps.</p>

CC BY-SA 3.0
2016-04-07T11:48:35.963Z
2016-04-07T11:48:35.963Z
Nikita Gritsuk
<p>Suppose that a firm has a Fixed cost of 10,000 dollars and Total Cost of 10,500 dollars for one unit and 11,100 dollars for two units of output.  Which of the following is true for the Marginal Cost (MC) and Marginal Product (MP) of the second unit of output?</p>

<p>a) Marginal Cost is $500 and Marginal Product is decreasing</p>

<p>b) Marginal Cost is $500 and Marginal Product is increasing</p>

<p>c) Marginal Cost is $600 and Marginal Product is decreasing</p>

<p>d) Marginal Cost is $600 and Marginal Product is increasing</p>

<p>e) Marginal Cost is $1100 and Marginal Product is decreasing</p>

<p>f) Marginal Cost is $1100 and Marginal Product is increasing</p>

<p>g) none of the above</p>

<p>The answer is c which I don't quite get. It's true that Marginal cost is $600, but since average cost is decreasing, we know the average product is increasing and thus marginal product may or may not decrease. Could someone help?  </p>

<microeconomics><cost><firm>
How to determine the marginal product for the following question?
CoolKid
# How to determine the marginal product for the following question?

(Asked by: username_0 on 2016-04-07)

Suppose that a firm has a Fixed cost of 10,000 dollars and Total Cost of 10,500 dollars for one unit and 11,100 dollars for two units of output. Which of the following is true for the Marginal Cost (MC) and Marginal Product (MP) of the second unit of output?

a) Marginal Cost is $500 and Marginal Product is decreasing

b) Marginal Cost is $500 and Marginal Product is increasing

c) Marginal Cost is $600 and Marginal Product is decreasing

d) Marginal Cost is $600 and Marginal Product is increasing

e) Marginal Cost is $1100 and Marginal Product is decreasing

f) Marginal Cost is $1100 and Marginal Product is increasing

g) none of the above

The answer is c which I don't quite get. It's true that Marginal cost is $600, but since average cost is decreasing, we know the average product is increasing and thus marginal product may or may not decrease. Could someone help?

**Tags:** microeconomics, cost, firm


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## 1 answers

### Answer by username_1 on 2016-04-07. Score: 2

MP = Change in output / Change in input
For the first product MP1 = 1 / 500
For the second MP2 = 1 / 600
Hence, the MP is decreasing.

Hope this helps.


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