ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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| The production function for a firm is: | ||||||
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q=-0.6L3+18L2K+10L where q is the amount of output, L is the number of labor hours per week, and K is the amount of capital. The wage is w = $100 and the rental rate is r = $800 per time period. |
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| a | Using Excel, calculate the total short-run output, q(L), for L = 0, 1, 2, …, 20, given that capital is fixed in the short run and K = 1. Also calculate the average product of labor; APL, and the marginal product of labor, MPL. | |||||
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| b | For each quantity of labor in (a), calculate the variable cost, VC; the total cost, C; the |
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| Hint: you will not be able to solve the total product curve for L as a function of output. So, instead construct a table, See the headings. |
| Use this definition | ||||||||||||||
| ΔTC/Δq | ||||||||||||||
| q | L | MPL | APL | TVC | TFC | TC | MC | AVC | AFC | r | w | Start | Step | |
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