Diminishing Returns

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Given the Production Function of a perfectly competitive firm, Q = 120L + 9L 2 – 0.5L 3 ,

where Q = Output and L = labor input

a. At what value of L will Diminishing Returns take effect?

b. Calculate the range of values for labor over which stages I, II, and III occur?

c. Suppose that the wage rate is $60 and the price of output is $2 per unit. How many

workers should the firm hire?

d. If demand forecasts predict an output level between 3500 and 3800 in the next decade,

what would be your long-run strategy to optimize the resources of your company? GET YOUR QUALITY 100% CUSTOM RESEARCH PAPER TODAY EFFICIENTLY ORDER A 5 STAR COLLEGE TERM PAPER NOW

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