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?
Given
a)
When X=8;
=72+240−192=120
MP=120
b)
When X=6;
AP=72+15(6)−(6×6)=126
AP=126
c) Q is maximum when
X=12or (X=−2 which is inadmissible)
d) Diminishing returns means, MP is decreasing i.e
30-9X=0
9X=30
X=3.33
Thus diminishing returns sets is when X>3.33
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