A firm’s only variable factor is labour and it produces a single product, X. It also has fixed costs. The short-run production function is; X=-0.1L3 + 6L2 + 12L. Where X is the output in tons, and L is the number of persons employed. How many persons are employed if the average physical product of labor is maximized? How many persons are employed if the marginal physical product of labor is maximized? What is the quantity of X when the average variable cost is minimized?
A firm’s only variable factor is labour and it produces a single product, X. It also has fixed costs. The short-run production function is; X=-0.1L3 + 6L2 + 12L. Where X is the output in tons, and L is the number of persons employed. How many persons are employed if the average physical product of labor is maximized? How many persons are employed if the marginal physical product of labor is maximized? What is the quantity of X when the average variable cost is minimized?
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.7P
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A firm’s only variable factor is labour and it produces a single product, X. It also has fixed costs. The short-run production function is;
X=-0.1L3 + 6L2 + 12L.
Where X is the output in tons, and L is the number of persons employed.
- How many persons are employed if the average physical product of labor is maximized?
- How many persons are employed if the marginal physical product of labor is maximized?
- What is the quantity of X when the
average variable cost is minimized?
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