Homework Answers
a)
AP, MP and TP relationship.
- When MP rises the AP also rises. MP begins to fall even when AP is rising.
- MP cuts AP where AP is maximum.
- TP rises at increasing rate as long as MP is rising.
- TP is maximum when MP is zero.
B)
Firm must operate at 2nd stage. Here , Total production of firm is maximum.
MP is positive in this stage.
Firm must not operate in third stage since here diseconomies of scale are larger than the economies of scale.
Firm must not operate in first stage either. Here economies of scale are much larger than diseconomies of scale. Thus it is incumbent on firm to raise the level of output.
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Product (MP) and Average Product (AP), for x ranging from 0 to 9
units.
Using the information from the table, graph these individual
curves and identify the rate of which diminishing marginal returns
are evident. Delineate the stages of production and
explain why Stages I and III are considered as
irrational whereas Stage II is termed as rational. What...
Using the information above. 1. Trace/graph the stages of production 2. Identify the point of diminishing...
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Suppose you are given the following production function
Q= 21x + 9x2-x3
Compose a table calculating the Total Product (Q), Marginal
Product (MP) and Average Product (AP), for x ranging from 0 to 9
units.
Using the information from the table, graph these individual
curves and identify the rate of which diminishing marginal returns
are evident. Delineate the stages of production and
explain why Stages I and III are considered as
irrational whereas Stage II is termed as rational. What...
Using the information above.
1. Trace/graph the stages of production
2. Identify the point of diminishing returns
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