Stage 1 of production starts at Q = and ends at Q = where we find the diminishing marginal returns starting after QL = 6 Stage 2 of production starts after the end of Stage 1 and ends at QL 10 The remaining levels of production starting after QL= 10 refers to the Stage 3 of production. In stage 1, the marginal product is the same with the average product, thus average product is positive In stage 2, the marginal product is lower than the average product, thus average product decreases but remains posi . Stage 3 begins when the marginal product is negative. Stage 3 begins when the marginal product is less than zero As long as the marginal product is greater than zero , total product will remain increasing and will not decrease. On the

Stage 1 of production starts at Q = and ends at Q = where we find the diminishing marginal returns starting after QL = 6 Stage 2 of production starts after the end of Stage 1 and ends at QL 10 The remaining levels of production starting after QL= 10 refers to the Stage 3 of production. In stage 1, the marginal product is the same with the average product, thus average product is positive In stage 2, the marginal product is lower than the average product, thus average product decreases but remains posi . Stage 3 begins when the marginal product is negative. Stage 3 begins when the marginal product is less than zero As long as the marginal product is greater than zero , total product will remain increasing and will not decrease. On the

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 3E

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Consider the following production function TPL = 12L2 – 0.8L3 Find the value of L that maximizes TPL Find the value of L that maximizes APL Find the value of L that maximizes MPL
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please analyze interaction ofmarginal cost and average cost numerically and derive the formula of thisrelationship with respect to relevant mathematical economics theory and interpret yourformula
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