The firm uses the following function to calculate the production output(PO): PO = 5.3C2L15 where C = capital invested and L = labour employed. If the capital invested increases by 20 percent, the change in PO will be
(a)
20% decrease
(b)
32% decrease
(c)
44% increase
(d)
56% increase
The firm uses the following function to calculate the production output(PO): PO = 5.3C2L15 where C = capital invested and L = labour employed. If the capital invested increases by 20 percent, the change in PO will be
(a)
20% decrease
(b)
32% decrease
(c)
44% increase
(d)
56% increase
Question ID - 56962 | SaraNextGen Top Answer
The firm uses the following function to calculate the production output(PO): PO = 5.3C2L15 where C = capital invested and L = labour employed. If the capital invested increases by 20 percent, the change in PO will be
(a)
20% decrease
(b)
32% decrease
(c)
44% increase
(d)
56% increase
|
The firm uses the following function to calculate the production output(PO): PO = 5.3C2L15 where C = capital invested and L = labour employed. If the capital invested increases by 20 percent, the change in PO will be |
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(a) |
20% decrease |
(b) |
32% decrease |
(c) |
44% increase |
(d) |
56% increase |
|
1 Answer
127 votes
Answer Key / Explanation : (c) -
POintial = 5.3
POnew =5.3
POinitial
Increase in PO = 0.44 POinitial
Increase % = 
127 votes
Answer Link
127