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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)L3 + 4L2 + 20L
a) What will be L and Q at the maximum short-run output (Q)?
b) What will be L and MPL at the maximum MPL?
c) At what level of output will the firm reach the point of diminishing returns to L?
d) Find L, APL and MPL at the maximum APL.
e) Determine the boundaries of the three stages of production (i.e., Stage 1, Stage 2, and
Stage 3) in terms of L.
Expert Solution
PFA
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