Always Round Tire has a production function of Q = 300 L^.75 K^.5. In the short run, if L = 250 and K = 25, what happens to the output of tires if L jumps to 300 and then 350. What law does this illustrate?

Question

Quizplus · Accepted Answer

The Answer is When L=250 and K=25 then Q=94307. When L increases to 300, Q increases to 108,127. When L increases to 350, Q increases to 121,379. This shows the effects of diminishing marginal returns to labor as a factor of production.

Always Round Tire Has a Production Function of Q =