Question

a short run production function is given as, Q=L³- 2L² - 4L+40 determine the number of laborers that should be used to maximize total product

Answer 1

To maximize total product we have to solve the equation:

$Q'=(L^3-2L^2-4L+40)'=0$

$3L^2-4L-4=0$ (SOLVE THE QUADRATIC EQUATION)

$L_1=2$

$L_2=-0.6667$