Suppose the production function for widgets is given by:

Q = KL - 0.8K^2 - 0.2L^2
where Q represents the quantity of widgets produced, K represents the annual capital input and L represents annual labor input.

(a) For K = 10, what is the average productivity of labor equal to?
-do i substitute k=10 into Q, and then what do i do to find the average productivity of labor?

(b) At what level of labor input does this average productivity reach a maximum? How many widgets are produced at this point?

(c) Again assuming that K = 10, what is the marginal product of labor equal to?

2 answers

  1. A.Q=40 &L=20
    B.Q=45 &L=25

  2. Output is maximum when L is 25, and the amount of output produced from this labor is 45 units.

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