question archive Suppose the production function for widgets is given by: Q = f (K,L) = KL − 0
Suppose the production function for widgets is given by: Q = f (K,L) = KL − 0
Subject:BusinessPrice: Bought3
Suppose the production function for widgets is given by: Q = f (K,L) = KL − 0.6K22
− 0.2L
1) Suppose L=25 (is fixed), derive an expression for and graph the total product of capital curve (the production function for a fixed level of labor) and the average productivity of capital curve.
2) At what level of capital input does the average productivity reach a maximum? How many widgets are produced at this point?
3) Again, assuming L=25, derive an expression for and graph the MPK curve. At what level of capital input does MPK =0?
4. Does this production function exhibit constant, increasing or decreasing returns to scale?
