Consider the short run production function Q = 10L - 0

Accounting Dec 08, 2020

Consider the short run production function Q = 10L - 0.5L2 where labor (L) is the only variable input. What is the average product when labor equals 4?

a.8

b.6

c.12

d.32

Expert Solution

a. 8

Reason:

Given : Q = 10L - 0.5L^2 ---> Production Function

Average Product = Q/ L

Dividing the production function by L on both sides we have,

Q/L = 10 - 0.5L

AP = 10 - 0.5L

When L = 4

AP = 10 - 0.5(4)

AP = 10 - 2 = 8

Hence the output per labor when 4 labors are employed is equal to 8.

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