Moe owns a restaurant that serves slabs of BBQ ribs. The size of his kitchen and the number of BBQ grills are fixed. Moe can vary the quantity of slabs by changing the number of workers he employs. Each worker earns $10/hr. and the fixed cost is $20. He observes the following relationship between the number of employees and the quantity of slabs produced:
Number of workers Quantity
(slabs per hour) Marginal Product Cost of Workers per hr. Total Cost
0 0
1 25
2 45
3 60
4 70
5 75
a. Fill in the rest of the table.
b. Graph the production function with Number of Workers on the horizontal axis and Quantity of Output on the vertical axis.
c. Does Moe’s production function exhibit diminishing marginal product of labor? Explain.