Derived the optimal combinations of labor and capital

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The production engineers at Impact Industries have derived the optimal combinations of labor and capital. These are the only two inputs used by Impact. The following chart shows the combinations of labor and capital for three levels of output.

Q is the output level. L* is the optimal amount of labor. K* is the optimal amount of capital. The price of labor is $100 per unit. The price of capital is $20 per unit.

Q L* K*

120 5 20

180 7 7

240 12 14

Are there diseconomies of scale over the output range 180 to 240? Explain in 25-50 words.

Reference no: EM131196866

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