Suppose that a firms short-run production is Q = 2L + 0.4L2 0.002L3 , where Q
Question:
Suppose that a firm’s short-run production is Q = 2L + 0.4L2 − 0.002L3 , where Q is units of output and L is labor hours.
a. Graph the production function for values L = 0 to L = 200.
b. What is the firm’s marginal product of labor equation? Graph the marginal product of labor equation for values L = 0 to L = 200.
c. What is the firm’s average product of labor equation? Graph the average product of labor equation for values L = 0 to L = 200.
d. Does this production function exhibit constant, increasing, or decreasing returns to scales when labor usage is increased from L = 2 to L = 4?
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Related Book For
Managerial Economics: Tools For Analyzing Business Strategy
ISBN: 307174
1st Edition
Authors: Thomas J Webster
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