What is the economic significance of the level of labor

Reference no: EM131430623

1. Short-run production functions, with equations. Suppose the production function for neon signs is given by: Q = f(K, L) = KL - 0.8K2 - 0.2L 2

(a) Suppose that capital is fixed at K = 10 in the short run. Find the expression for the average product of labor (APL).

(b) Again assuming that K = 10, determine the expression for the marginal product of labor (MPL).

(c) Graph both the APL and the MPL curves on the axes. (You can assume that 10 = L = 40; otherwise output is negative.) Label all horizontal intercepts of both curves. What is the economic significance of the level of labor at which MPL = 0?

Reference no: EM131430623

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