Question

Complete the following table. Identify the phase of production which is relevant from the viewpoint of producer's equilibrium.

Units of Labour	$TP$	$AP$	$MP$
$1$ $2$ $3$ $4$ $5$ $6$ $7$ $8$	$4$ $12$ $24$ $32$ $36$ $36$ $28$ $16$	- - - - - - - -	- - - - - - - -

Answer 1

Units of Labour	$TP$	$AP$	$MP$
$1$ $2$ $3$ $4$ $5$ $6$ $7$ $8$	$4$ $12$ $24$ $32$ $36$ $36$ $28$ $16$	$4$ $6$ $8$ $8$ $7.2$ $6$ $4$ $2$	$4$ $8$ $12$ $8$ $4$ $0$ $-8$ $-12$

Relevant phase for Producer's Equilibrium: Phase of diminishing returns to a factor which is a phase of rising $MC$.