Suppose the production function for widgets is given by KL – 0.5K2 – 0.1 L2 , where q represents the annual quantity of widgets produced, K represents annual capital input, and L represents annual labor input. (a). Suppose K=5; what is the average productivity of labor (Average product of Labor, MPL) (b). Suppose K=10; at what level of labor input does the total output reach the maximum?
Suppose the production function for widgets is given by KL – 0.5K2 – 0.1 L2 , where q represents the annual quantity of widgets produced, K represents annual capital input, and L represents annual labor input. (a). Suppose K=5; what is the average productivity of labor (Average product of Labor, MPL) (b). Suppose K=10; at what level of labor input does the total output reach the maximum?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 7E
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Suppose the production function for widgets is given by KL – 0.5K2 – 0.1 L2 , where q represents the annual quantity of widgets produced, K represents annual capital input, and L represents annual labor input.
(a). Suppose K=5; what is the average productivity of labor (Average product of Labor, MPL)
(b). Suppose K=10; at what level of labor input does the total output reach the maximum?
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