Answer:
a.) Marginal Product (MP) = 120
b.) Average Product = 126
c.) At x = 12, the output is maximum.
d.) After 5 levels of inputs diminishing returns set in.
Step-by-step explanation:
Given that,
Q = 72x + 15x² - x³
a.)
Marginal Product is equal to
At x = 8
MP = 72 + 30(8) - 3(8)²
= 72 + 240 - 192
= 120
∴ we get
Marginal Product (MP) = 120
b.)
Average Product is equals to
=
= 72 + 15x - x²
At x = 6
Average Product = 72 + 15(6) - 6²
= 72 + 90 - 36
= 126
∴ we get
Average Product = 126
c.)
For Maximizing Q,
Put
⇒72 + 30x - 3x² = 0
⇒24 + 10x - x² = 0
⇒x² - 10x - 24 = 0
⇒x² - 12x + 2x - 24 = 0
⇒x(x - 12) + 2(x - 12) = 0
⇒(x + 2)(x - 12) = 0
⇒x = -2, 12
As items can not be negative
∴ we get
At x = 12, the output is maximum.
d.)
Now,
For Diminishing Return
⇒30 - 6x < 0
⇒-6x < -30
⇒6x > 30
⇒x > 5
∴ we get
For x > 5, the diminishing returns set in
i.e.
After 5 levels of inputs diminishing returns set in.
