Assume a firm's production function is Q=AL0.65 K0.45, in which A is a positive constant, 0...

 

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Assume a firm's production function is Q=AL0.65 K0.45, in which A is a positive constant, 0 < K is units of capital, and 0 < L is units of labor. a. (2 pts.) What does the average product of labor, APL, equal? Simplify your answer. b. (3 pts.) If a firm were to double its employment of labor and capital, how much, or what percent, would production increase? c. (3 pts.) Which returns to scale does production exhibit? Briefly explain your answer for a business person who does not understand power functions. Assume a firm's production function is Q=AL0.65 K0.45, in which A is a positive constant, 0 < K is units of capital, and 0 < L is units of labor. a. (2 pts.) What does the average product of labor, APL, equal? Simplify your answer. b. (3 pts.) If a firm were to double its employment of labor and capital, how much, or what percent, would production increase? c. (3 pts.) Which returns to scale does production exhibit? Briefly explain your answer for a business person who does not understand power functions.

Answer rating: 100% (QA)

1 APL QL AL065K045L AL065K045L1 AK045L02 2 Q AK065L045 Q A2K0652L045 QQ 2065 2045 211 17 ... View the full answer