You and your family own a Christmas tree farm where you produce and sell Christmas trees. You want to consider the amount of water it takes to produce your trees. So, the following table displays different quantities of variable input in units of water resulting in total output of Christmas trees. Assume that the cost for water which is the variable input is $350/unit. All other costs of production are held constant as your total fixed costs of $4500. You are interested in knowing some production and cost information for your business. Using the formulas provided in your text and in Explorations in Content, complete the following Production and Cost table (which is already partially completed for you) by filling in the highlighted blanks for Marginal Physical Product (MPP), Total Cost (TC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Average Total Cost (ATC) and Marginal Cost (MC). (Note: Find Marginal Physical Product and Marginal Cost as changes from the previous level to the current level.)
