Answer to Question #173758 in Economics of Enterprise for Michael Okon NKANTA

Question

Suppose the total product (Q) is given by the production function; [q = 4KL-0.5]

Where K= capital = 12 and L = unit of labour -36.

Calculate the average product of labour

Answer 1

We can find the average product of labour as follows:

$$AP_L=\dfrac{q}{L},$$ $$AP_L=\dfrac{4KL^{-0.5}}{L}=\dfrac{4K}{L^{1.5}}.$$

Substituting the numbers, we get:

$$AP_L=\dfrac{4K}{L^{1.5}}=\dfrac{4\cdot12}{36^{1.5}}=0.22$$