Suppose a firm faces the production function q = L^{0.75}K^{0.25}. A. What is the average product...
Question:
Suppose a firm faces the production function {eq}q = L^{0.75}K^{0.25} {/eq}.
A. What is the average product of labor, holding capital fixed? What is the marginal product of labor?
B. What are the APL, and MPL when {eq}K {/eq} is fixed at 16?
Average Product & Marginal Product:
The marginal product of labor describes how much output is produced when firms add one more extra labor unit while holding constant other production factors. The average product of labor is the average output that each unit of labor input can produce. The marginal product of labor and the average product of labor rely on the portion of fixed capital used. The workers are less productive if less capital input is used.
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View this answerSuppose a firm faces the production function {eq}q = L^{0.75}K^{0.25} {/eq}.
A. What is the average product of labor, holding capital fixed? What is...
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Total Product, Average Product & Marginal Product in Economics
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Chapter 4 / Lesson 2
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In Economics, there are three factors involved in the theory of production: total product, average product, and marginal product. Explore this theory and learn how to maximize the efficiency of these production tools.
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