Question

In: Economics

The short-run production function for a manufacturer of DVD drives is as follows:

The short-run production function for a manufacturer of DVD drives is as follows:

       Number of Workers (Quantity of Labor)                        Total Output of DVD Drives

0 0   

1 7000

2 20000

3 30000

4 36000

5 40000

6 42000

  1. Calculate the average product (AP) at each quantity of labor.

  2. Calculate the marginal product (MP) at each quantity of labor.

  3. After which worker do diminishing marginal returns set in?

  4. In the region of diminishing marginal returns, what is happening to marginal cost? Explain.

Solutions

Expert Solution

a) & b) Ans:

Number of workers
(Quantity of Labor)		 Total Output of DVD Drives AP MP
0 0 -- --
1 7000 7000 7000
2 20000 10000 13000
3 30000 10000 10000
4 36000 9000 6000
5 40000 8000 4000
6 42000 7000 2000

Explanation:

AP = Total Product / Number of workers

MP = Change in Total Product / Change in Number of workers

c) Ans: After 2nd worker diminishing marginal returns sets in.

d) Ans: In the region of diminishing marginal returns, marginal cost increases. Becuase marginal product and marginal costs are inversely related.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

What is Production Function? Explain Factors of Production. Differentiate short run and long run production function.
What is Production Function? Explain Factors of Production. Differentiate short run and long run production function.
What is Production Function? Explain Factors of Production. Differentiate short run and long run production function.
What is Production Function? Explain Factors of Production. Differentiate short run and long run production function.
Question 4 A firm has the short-run production function as follows: Q = L + 15L2...
Question 4 A firm has the short-run production function as follows: Q = L + 15L2 – 0.5L3, where Q = total products per period and L = number of workers employed per period. 4.1) Derive the marginal product of labor (MPL). At what number of workers (L) does the law of diminishing returns begin? MPL = f(L) = __________________________________ Law of diminishing return begins when L =   ___________ workers. 4.2) Derive the average product of labor (APL). Find the number...
Explain the relationship between a firm’s short-run production function and its short-run cost function. Focus on...
Explain the relationship between a firm’s short-run production function and its short-run cost function. Focus on the marginal product of an input and the marginal cost of production. (p. 283 #3
. Distinguish the long-run production from the short-run and explain the various long run production function...
. Distinguish the long-run production from the short-run and explain the various long run production function with the help of isoquants.
Suppose a firm's short run-run production function is q = 2 * L0.5 , the firm...
Suppose a firm's short run-run production function is q = 2 * L0.5 , the firm faces a fixed price of L at PL = 4, and the firm’s fixed cost is 50. a. Derive the short-run total cost and total variable cost functions, and then solve for the marginal cost, average variable cost, and average total cost functions. Assume the firm is a marginal price taker at P = 60, solve for the firm’s profit-maximizing amount of L to...
a. Distinguish between the short run and the long run production function. Discuss the four factors...
a. Distinguish between the short run and the long run production function. Discuss the four factors of production elaborately. Provide at least 5 examples of each.   b. Bangladesh a labor intensive country. So the labor is cheaper than other factors of production. Consider this case: The number of Business graduate is higher than the Doctor. Consequently, the price or wage of Business graduate will be lower than the wage of Doctor. That discourages the prospective student to be a Business...
Consider a Cobb-Douglas production function: f(L, K) = 0.5K0.5L0.5. Using this production function, solve a short-run...
Consider a Cobb-Douglas production function: f(L, K) = 0.5K0.5L0.5. Using this production function, solve a short-run profit maximization problem for a fixed capital stock K=4, output price p=8, wage rate w=2, and capital rental rate r=4
The ABC Corporation produces just one product, widgets. The company’s new economist has calculated a short-run production function as follows:
Technology and Production TheoryThe ABC Corporation produces just one product, widgets. The company’s new economist has calculated a short-run production function as follows:           Q = 7L + 0.6L2 – 0.1L3Where Q is the number of widgets produced per day and L is the number of production workers working an eight-hour day.Develop a production schedule with L equaling 1 to 10.Calculate the Average and Marginal Product.
For a short run production function, MPL= 2 and the price at which the good can...
For a short run production function, MPL= 2 and the price at which the good can be sold at is $5, more workers will be hired if the price if the wage rate is less than _____ dollars.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT