Question
Suppose that a pizzeria produces pizzas with labor (L) and pizza ovens (K). Dividing tasks among workers (rolling the dough, topping the pizza, monitoring the
Suppose that a pizzeria produces pizzas with labor (L) and pizza ovens (K). Dividing tasks among workers (rolling the dough, topping the pizza, monitoring the oven, etc) makes each worker more efficient, but with too many workers the restaurant gets crowded and distracting. The production function for pizzas is given by: = (,) =2K(L^2)-(1/3 L^3)
A) Suppose that capital is fixed at K=4 in the short run. Find the expression for average product of labor (APL)
B) Still assuming that capital is fixed at K=4, find the marginal product of labor (MPL)
C) Graph APL and MPL on the same graph. Label horizontal intercepts of both curves.
D) For what level of labor is the average product of labor maximized? At this level of labor, what are the values of MPL and APL?
E) Does this production function exhibit increasing, decreasing, or constant returns to scale?
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