Answer to Question #223444 in Economics for Anna Paula Quimbra

Question

4. Suppose the following production function data. Complete [4 marks] and answer the questions below.

Labour Total Product

1 10

2 22

3 36

4 48

5 55

6 60

7 60

8 56

a) Where does the law of diminishing returns set in? Explain your answer using graph. [6]

b) Where is TP = 0 and what happens to MP curve at that point? [4]

c) Explain, using a graph, each stage/phase of the production function in terms of returns to labour.

Answer 1

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