4) Define average and marginal product. Explain how to use each in production decision making. Use the information given in the table below to calculate average and marginal product, and identify the profit maximizing production area.

Amount of Variable Input	Amount of output	Average Product	Marginal Product
0	0
1	21
2	46
3	76
4	110
5	134
6	143
7	136

5) You are given the following table by one of your analysts. Explain how you would determine how much labor you will need to maximize profits.

Determining the Profit-Maximizing Point for Labor Use

Amount of Output	Net Revenue*	Marginal Revenue	Amount of Variable input (Labor)	Total cost of Labor (At $300 per worker)	Marginal Cost
0			0
35	875	875	1	300	300
46	1,150	275	2	600	300
76	1,900	750	3	900	300
110	2,750	850	4	1,200	300
134	3,350	600	5	1,500	300
143	3,575	225	6	1,800	300
136	3,400	(175)	7	2,100	300

*Net Revenue exclusive of labor is $25/ton