Calculate the average product of labour

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1. A firm can manufacture a product according to production function

a. Calculate the average product of labour, APL,when the level of capital is fixed at 16 units and the firm uses 16 units of labour. How does the average product of labour change when the firm uses 81 units of labour?

b. Find an expression for the marginal product of labour, MPL, when the amount of capital is fixed at 16 units. Then, illustrate that the marginal product of labour depends on the amount of labour hired by calculating the marginal product of labour for 16 and 81 units of labour.

c. Suppose capital is fixed at 16 units. If the firm can sell its output at a price of $100 per unit and can hire labor at $25 per unit, how many units of labor should the firm hire in order to maximize profits?

Reference no: EM131051094

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