Question
Joe's coffee house operates under the production function Q(L,K)= LK + (LK)1/2 . In the shortrun, capital (K) is fixed while labor (L) is variable.
Joe's coffee house operates under the production function Q(L,K)= LK + (LK)1/2 . In the shortrun, capital (K) is fixed while labor (L) is variable. Which statement correctly describes Joe's short-run total product of labor curve?
a. Total product of labor everywhere increases at a decreasing rate.
b. Total product of labor everywhere increases at an increasing rate.
c. Total product of labor everywhere increases at a constant rate.
d. Total product of labor initially increases at an increasing rate, then increases at a decreasing rate, and eventually decreases. e. Total product of labor initially increases at a decreasing rate and then eventually increases at an increasing rate
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