Identify the amounts of labour where diminishing returns to capital set.
Given the subsequent production function:
Q = 42L + 18L2 -2L3 where q= tp (total product) or quantity of output in units and L (labour) in units
Find the subsequent: First solve this problem using an Excel spreadsheet approach and then do the problem using the optimization procedure; compare the answers for the two methods.
1. The amounts in units of labour when diminishing returns to capital set in and then describe why this happens.
2. The amount in units of labour used when the average product curve is at its highest point.
3. Illustrate what amount of labour in units should be used to get maximum output?