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# Average Product of Capital and Average Product of Labor

A firm’s product sells for \$4 per unit in a highly competitive market. The firm produces output using capital (which it rents at \$25 per hour) and labor (which is paid a wage of \$30 per hour under a contract for 20 hours of labor services). Complete the following table and use that information to answer the questions that follow.

Instruction: Round your answers for Average Product of Capital and Average Product of Labor to 2 decimal places.

 (1) (2) (3) (4) (5) (6) (7) Capital Labor Output Marginal Product of Capital MPK Average Product of Capital APK Average Product of Labor APL Value Marginal Product of Capital  VMPK 0 20 0 – – – – 1 20 50 2 20 150 3 20 300 4 20 400 5 20 450 6 20 475 7 20 475 8 20 450 9 20 400 10 20 300 11 20 150

. Identify the fixed and variable inputs.