Question #198400

Given the Production Function Q = 72X + 15X2 - X3, where Q =Output and X=Input

a) What is the Marginal Product (MP) when X = 8?

b) What is the Average Product (AP) when X = 6?

c) At what value of X will Q be at its maximum?

d) At what value of X will Diminishing Returns set in?


1
Expert's answer
2021-05-26T11:50:38-0400

Given 72X+15X2X372X + 15X^2 - X^3


a) MP=dQdX=72+30X3X2MP=\frac {dQ} {dX} =72+30X-3X^2


When X=8;


72+30(8)3(8)272+30(8)-3(8)^2


=72+240−192=120


MP=120


b) AP=QX=72+15XX2AP=\frac {Q} {X} =72+15X-X^2


When X=6;


AP=72+15(6)−(6×6)=126


AP=126


c) Q is maximum when dQdX=0\frac {dQ} {dX} =0


72+30X3X2=072+30X-3X^2=0


3X230X72=03X^2-30X-72=0


X210X24=0X^2-10X-24=0


X212X+2X24=0X^2-12X+2X-24=0


X(X12)+2(X12)=0X(X−12)+2(X−12)=0


X=12or (X=−2 which is inadmissible)


d) Diminishing returns means, MP is decreasing i.e

dMPdX<0\frac {dMP} {dX} \lt 0


dMPdX=0\frac {dMP} {dX} =0


30-9X=0


9X=30


X=3.33


Thus diminishing returns sets is when X>3.33

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!
LATEST TUTORIALS
APPROVED BY CLIENTS