QUESTION 3 ABC Manufacturing Company Limited recently hired you to estimate the firm’s production function. Based on your research you have derived the following production function, F(K, L) = KL2. Assuming That capital is fixed at 1 unit, answer the following: a. Calculate the average product of labour when 9 units of labour are utilised b. Calculate the marginal product of labour when 9 units of labour are utilised. (HINT: Recall Marginal requires differential) c. Assuming that capital is no longer fixed and that the price of capital is $10, and the price of Labour is $15. What combination of capital and labour minimizes the cost of producing any Given output?
QUESTION 3 ABC Manufacturing Company Limited recently hired you to estimate the firm’s production function. Based on your research you have derived the following production function, F(K, L) = KL2. Assuming That capital is fixed at 1 unit, answer the following: a. Calculate the average product of labour when 9 units of labour are utilised b. Calculate the marginal product of labour when 9 units of labour are utilised. (HINT: Recall Marginal requires differential) c. Assuming that capital is no longer fixed and that the price of capital is $10, and the price of Labour is $15. What combination of capital and labour minimizes the cost of producing any Given output?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter7: Proudction Costs
Section: Chapter Questions
Problem 2SQ
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QUESTION 3
ABC Manufacturing Company Limited recently hired you to estimate the firm’s production function.
Based on your research you have derived the following production function, F(K, L) = KL2. Assuming That capital is fixed at 1 unit, answer the following:
a. Calculate the average product of labour when 9 units of labour are utilised
b. Calculate the marginal product of labour when 9 units of labour are utilised. (HINT: Recall Marginal requires differential)
c. Assuming that capital is no longer fixed and that the price of capital is $10, and the price of Labour is $15. What combination of capital and labour minimizes the cost of producing any Given output?
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