Solve production function using excel and optimization procedure
October 5th, 2022
Given the following production function:
Q = 42L + 18L2 -2L3 WHERE Q= TP (TOTAL PRODUCT) or quantity of output in units and L(labor) in units
FIND THE FOLLOWING: First solve this problem using an spreadsheet approach and then do the problem using the optimization procedure; compare the answers for the two methods. Show your work to receive credit.
A: The amount in units of labor when diminishing returns to labor sets in and then explain why this happens.
B. The amount in units of labor used when the average product curve is at its highest point.
C. What amount of labor in units should be used to get maximum output?