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Saturday, 16 May 2015

PRODUCTION FUNCTION IN PRODUCTION MANAGEMENT



For: Questions and answers email: theotherwomaninmarriage@gmail.com
     
QUESTION:
Given the following function:
Q=10L+6L2-0.02L3
Where L is the labour and ranges from 1 to 10.  Does this function exhibit the law of diminishing marginal productivity for labour?

SOLUTION:
Yes – the function exhibit the law of diminishing marginal productivity for labour.

Then solution to the function:
Q=10L+6L2-0.02L3
Where L = 1:
Q=10 (1) + 6 (1)2 – 0.02 (1)3

Q=10 (1) + 6 (1) – 0.02 (1)
Q=10+6 -0.02
Q=16 -0.02
Q=15.98
Our Q when L =1 is 15.98.


Explanation:
You have to replace the figure of L which is one (1) in the once I just solve above where ever you see L: You know we are to solve for 1 to 10:  So, I will do another example of solving for 2 then you will do the rest for 3, 4, 5, 6, 7, 8, 9, 10.

So, all we need to do, is to substitute each figure in where L is found in the equation and solve.

Let’s solve for 2 now:
Q=10L+6L2-0.02L3
Where L = 2:
Q=10 (2) + 6 (2)2 – 0.02 (2)3

Q=10 (2) + 6 (4) – 0.02 (8)
Q=20+24 -0.16
Q=44 -0.16
Q=43.83

Our Q when L =2 is 43.83.

You can now solve for 3, 4, 5,6,…. To 10.
You can do it.

You can always contact theotherwomaninmarraige@gmail.com in any area you don’t understand or comment directly on the blog and the grey areas will be cleared. 


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