A farmer uses a certain technology that produces electricity. His production function is given as: q = f(k,l) = 1000k 10120 - 201³ Where q is the no. of megawatts of electricity his company is producing. Suppose that their electrical generators, k=20, calculate for the following: 1. Marginal product of labor 2. Average product of labor if k=20 3. If k decreases from 20 to 17, calculate the new MP of labor and the average product. Explain intuitively what happens to the MP and the average product.
A farmer uses a certain technology that produces electricity. His production function is given as: q = f(k,l) = 1000k 10120 - 201³ Where q is the no. of megawatts of electricity his company is producing. Suppose that their electrical generators, k=20, calculate for the following: 1. Marginal product of labor 2. Average product of labor if k=20 3. If k decreases from 20 to 17, calculate the new MP of labor and the average product. Explain intuitively what happens to the MP and the average product.
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 6P
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