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2. Suppose the production function for widgets is given by where q represents the annual quantity of widgets produced, K represents the annual capital input, and L represents the annual labor input. a. Suppose K 10, write down the expressions for the total product and the average product of labor. At what level of labor input does average productivity reach a maximum? How many widgets are produced at that point? b. Again, assuming that K-10, graph the average product of labor and the marginal product of labor curves. At what level of labor input does MPL 0? Is the MPL always diminishing as L increases? c. Suppose the capital input was increased to K 20. How would your answers to parts a and b change? Does the widget production function exhibit constant, increasing, or decreasing returns to scale? d.
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