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1. If a firm enjoys economies of scale up to certain output level, and constant returns after that, what can you say about the shape of the long run average cost curve?
2. In a production process is it possible to have increasing marginal product in an input and yet increasing returns to scale.
3. What do the marginal product look like if diminishing marginal returns set in after the very first unit of labor is employed?
4. Suppose the production function of CDs is given by
Q=L²-L³
Where the Q is the number CDs produced per year, K is the machine-hours, and L is the labor-hours.
(a) Derive the MP and AP functions for labor.
(b) Graph the MP and AP.
(c) At what level labour do MP and AP reach their maximums?
(d) Describe the relationship between the MP and AP.
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
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