Hi! I’m not sure how to approach this question, so I would really appreciate if you could do it and show me the steps. Thank you!
For the following, consider a typical short-run production scenario:
a.) Assuming that MPL is greater than APL at low levels of output, draw a graph of curves that represent MPL and APL at various levels of labor. In a sentence or two, explain how changes in APL are determined by the level of the MPL.
b.) Draw a graph illustrating the standard representation of AFC, AVC, AC & MC. In a sentence or two, explain why MC crosses AVC and AC where it does.
c.) Now consider the graph of a Cobb-Douglas production function in the short-run: q=(NL^(1/2))(K^(1/2)), where N>0 and K bar (symbol where bar is over top of K) is some fixed amount of capital.
i. Briefly explain how we can identify MPL and APL from the graph.
ii. Show the point where APL is at its maximum on your graph and label that labor level L*. At L*, is the MPL greater than, less than, or equal to APL? Explain in a sentence how your graph of the production function illustrates your answer about the relationship between MPL and APL at L*.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more