Question

In: Economics

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 Theory


The 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 – 0.1L3

Where 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.

Solutions

Expert Solution

Q= 7L + 0.6L2 -0.1L3

MPL =7 + 1.2L -0.3L2

APL = Q/L = 7 +0.6L -0.1L2

L Q APL=Q/L MPL= Change in Q
1 7.5 7.5 -
2 (14+2.4-0.8)=15.6 7.8 8.1
3 (15+5.4-2.7)=17.7 5.9 2.1
4 (28+9.6-6.4)=31.2 7.8 13.5
5 (35+15-12.5)=37.5 7.5 6.3
6 (42+21.6-21.6)=42 7 4.5
7 (49+29.4-34.3)=44.1 6.3 2.1
8 (56+38.4-51.2)= 43.2 5.4 -0.9
9 (63+48.6-72.9)= 38.7 4.3 -4.5
10 (70+60-100)= 30 3 -8.7

Rahul Sunny answered 2 years ago
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