Suppose the Production Function for T-Shirts Can Be Represented as Q

question 38

Essay

Suppose the production function for T-shirts can be represented as q = L⁰.²⁵ K⁰.⁷⁵.Show that the marginal productivity of labor diminishes in the short run.

---

Definitions:

Accrued Expenses

Costs that have been incurred but not yet paid for, recognized under the accrual basis of accounting.

Accounts Receivable

Money owed to a company by its clients or customers for goods or services delivered but not yet paid for.

Accounts Payable

Money owed by a business to its suppliers shown as a liability on the company’s balance sheet.

Statement of Cash Flow

A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations, investment activities, and financial activities, as well as all cash outflows that pay for business activities and investments during a given period.