A firm's short- run production function is given by Q = L3 e- 0.02L
Find the value of L which maximises the average product of labour.
A)100
B)200
C)150
D)250
E)50

Question

Quizplus · Accepted Answer

To maximize the average product of labor (APL), we set the derivative of APL with respect to L to zero. The APL is given by Q/L = L^2 e^(-0.02L). Differentiating and solving for L gives L = 100.

A Firm's Short- Run Production Function Is Given by Q