Suppose that some production process requires amount of capi

Suppose that some production process requires amount of capital used is foed at K-4 (capital is hnd for wesne of- used can change. The table below gives the relationship -\"ww a\"d 13 9 capital O and abor .3 Suppo tha e Labor(? : Otput6? 0 0 20 40 60 the Marginal Product of Labor IMPLI between Looand o\'t beten L-4, between L-4 and L-9 b) Using your answers from part (a), does this production technology esib dng marginal product of labor (MPL)? Briefly explain (c) Remember that the amount of capital used is freed at Knd Suppoe each unt of c costs $20 and each unit of labor costs $15 with this answer box to fill out the table (Otherwise you could provide ansr for cost, for example, FC at q-O is.. at q-20 is... VC at o-0is-20 TC q-O is...etc) t you to copy and paste the information, fill out the following table Try MacBook Air

Solution

L

Q

MPL

0

0

1

20

20.00

4

40

6.67

9

60

4.00

With the increase in Q, the MPL is decreasing hence the production technology exhibits diminishing returns

Q

FC

VC

TC

0

80

0

80

20

80

15

95

40

80

60

140

60

80

135

215

L	Q	MPL
0	0
1	20	20.00
4	40	6.67
9	60	4.00