Answer to Question #67187 in Economics for Mohamed alxadari

Question

A firm estimates its cubic production function of the following form
Q = AL3 + BL2
and obtains the following estimation results

DEPENDENT VAR: Q F-RATIO: 42.175
OBSERVATIONS 62 R-SQUARE: 0.7631

VARIABLE PARAMETER STANDARD
ESTIMATE ERROR T-RATIO

L3 -0.05 0.013 3.83
L2 0.60 0.25 2.40

The firm pays RM36 per unit for labour services.
The estimated total, average, and marginal product functions are:
Q = ___________________________________________________

AP = __________________________________________________

MP = _________________________________________________

Are the parameters of the correct sign and are they significant?

Average product reaches its maximum value at________ units of labour?

Average product reaches its minimum value at _________units of abour?

At the output level for part d,

AVC = RM____________

SMC = RM____________

When labour usage id 7 units,
AVC = RM___________
SMC = RM___________