Tom leases a farmer’s field for $120 a day and grows pineapples. He pays students $100 a day each to pick pineapples and he leases capital at $80 a day. Table 1 shows Tom’s daily output.

1. What is Tom’s total cost and average total cost of 300 pineapples a day?

2. What is the marginal cost of picking a pineapple when the quantity increases from 360 to 400 pineapples a day?

3. At what output is Tom’s average total cost a minimum?

Transcribed Image Text:

TABLE 1 Labor (students) 0127 456FWN-0 3 Output (pineapples per day) 0 100 220 300 360 400 420 430