With a quadratic production with fixed capital Q = A + BL + CL² and the shape shown above,A is A)positive and greater than B. B)positive and less than B. C)zero. D)negative.

Question

Quizplus · Accepted Answer

Since the shape of the equation is a quadratic function, it is of the form ax^2 + bx + c. In this case, the coefficient of the linear term (B) and the coefficient of the interaction term (CL²) are both non-zero, so we can see that the equation has no constant term (c = 0). Therefore, A must be equal to 0 in order for the quadratic function to pass through the origin (when all other variables are set to 0). Thus, the answer is C) zero.

With a Quadratic Production with Fixed Capital Q = a