Consider the Following Short-Run Production Function: Q = 5L² -

question 47

Essay

Consider the following short-run production function: q = 5L² - 1/3 L³.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

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Definitions:

Perfectly Inelastic

Describes a situation in which the quantity demanded of a good does not change regardless of changes in its price.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is unachievable.

Tax

A required financial fee or another kind of duty enforced on a taxpayer by government authorities, designed to raise funds for government outlays and a range of public expenses.

Price-Elastic Supply

A situation where the quantity supplied of a good changes significantly as a result of changes in its price.