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Homework answers / question archive / Suppose Zeta company has the following short-run production function, where Q is output per time period and L is the number of units of labor hired

Suppose Zeta company has the following short-run production function, where Q is output per time period and L is the number of units of labor hired.

Q = -(1/3)L^{3} + 4L^{2} + 20L

a) What will be L and Q at the maximum short-run output (Q)?

b) What will be L and MP_{L} at the maximum MP_{L}?

c) At what level of output will the firm reach the point of diminishing returns to L?

d) Find L, AP_{L} and MP_{L} at the maximum AP_{L}.

e) Determine the boundaries of the three stages of production (i.e., Stage 1, Stage 2, and

Stage 3) in terms of L.

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