Question
Suppose you are given the following equation for production function: Q=21L + 9L^2 - L^3 where Q is the quantity of output and L is
Suppose you are given the following equation for production function:
Q=21L + 9L^2 - L^3
where Q is the quantity of output and L is the quantity of labour input.
a)Sketch the production function and on a separate diagram sketch the MPL & APL curves. Indicate all the key values.
b) now suppose that the price of each unit of labour is $500, what is the TVC AND AVC when the firm maximises its labour productivity ?
c) on 3rd diagram, sketch the MC and and the AVC that correspond to the MPL and APL curves.
I need help with the graphs by clearly mentioning the points on the graph wherever required.
Thanks.
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