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You collect the following production data for your firm:
Q L
264 2
1319 6
515 3
74 1
1642 9
1049 5
1445 7
714 4
1208 11
1539 10
a. Which functional form (linear, quadratic, cubic) is most suitable to your data? Construct a scatter diagram but be sure to just do the dots, don't include the lines that connect them. Then, play around with the trendline feature and include what you consider to be the best trendline.
b. Using OLS, estimate the firm's short-run production function. Comment on the strength of the regression results.
c. Calculate the Q, AP, and MP for L = 8 workers.
d. At 8 workers, is SMC rising or falling, and how do you know?
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If Kitto's EBIT IS $200,000, the debt is $300,000, the tax rate is 35%, the rd is 8%, the growth rate is 8%, and the rsU us 12%.
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