Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is: A) the order quantity divided by the number of inventory cycles per year.
B) the annual demand divided by the number of inventory cycles per year.
C) half of the order quantity.
D) half of the annual usage.

In the short-run, marginal costs are equal to the change in variable costs as output changes. ( mc = change in variable cost / change in quantity) assume that capital is fixed in the short-run. (a) start with the equation for marginal cost and derive an equation that relates marginal cost of production to the cost and productivity of labor. (b) draw a standard looking short-run marginal cost curve and use the equation you derived to explain its shape.