Question
You collect the following production data for your firm: Q L 182 2 961 6 433 3 66 1 1,358 9 969 5 1,321 7
You collect the following production data for your firm:
Q L
182 2
961 6
433 3
66 1
1,358 9
969 5
1,321 7
678 4
1,024 11
1,170 10
a.Which functional form (linear, quadratic, cubic) is most suitable to your data? Construct a scatter diagram but be sure to just do the dots; don't include the lines that connect them. Then, play around with the trendline feature and include what you consider to be the best trendline.
b.Using OLS, estimate the firm's short-run production function. Comment on the strength of the regression results.
c.Calculate the Q, AP, and MP for L = 8 workers.
d.At 8 workers, is MC rising or falling, and how do you know?
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