Does it follow that because we observe that the aver-age product of labor is higher for Firm 1 than for Firm 2, Firm 1 is more productive in the sense that it can produce more output from a given amount of inputs? Why?
Answer to relevant QuestionsA production function has the property that f( xL, xK) = x2f( L, K) for any positive value of x. What kind of returns to scale does this production function exhibit? If the firm doubles L and K, show that the marginal ...Firm 1 and Firm 2 use the same type of production function, but Firm 1 is only 90% as productive as Firm 2. That is, the production function of Firm 2 is q2 = f(L, K), and the production function of Firm 1 is q1 = 0.9f (L, ...Give the formulas for and plot AFC, MC, AVC, and AC if the cost function is a. C = 10 + 10q,b. C = 10 + q2, or c. C = 10 + 10q - 4q2 + q3. CA bottling company uses two inputs to produce bottles of the soft drink Sludge: bottling machines (K) and workers (L). The isoquants have the usual smooth shape. The machine costs $ 1,000 per day to run and the workers earn ...The United Kingdom started regulating the size of grocery stores in the early 1990s, and today the average size of a typical U. K. grocery store is roughly half the size of a typical U. S. store and two-thirds the size of a ...
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