Production Function and Law of Diminishing Returns
Question # 00659656
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Updated on: 03/09/2018 06:37 AM Due on: 03/09/2018
- Problem: "Production Function and Law of Diminishing Returns." (15 points)
Suppose that a production function can be written Q = 9KL2 -L3.
a). Assuming K=1, complete the following table:
L Q MP AP
0
1
2
3
4
5
6
7
8
9
d). For K=1, determine the formula for the average product of labor. At what level of L does the average product of labor equal the marginal product of labor?
e). At what level of labor does the marginal product of labor become negative? How does this relate to the point at which the total product is at a maximum?
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Solution: Production Function and Law of Diminishing Returns