panal1 - Additional Problem 1: Production Analysis 1. A...

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Additional Problem 1: Production Analysis 1. A gardenia grower applies successive units of a soil nutrient (the variable input) to his/her gardenias (the fixed factor) and determines the following yield (total output) in dozens of gardenias. Nutrient (ounces) Gardenias (TP) (dozens) Marginal Output (MP) Average Output (AP) 00 15 0 29 0 3 120 4 140 5 150 6 155 7 158 a. Does this production function exhibit increasing, decreasing, constant returns, or some combination of the three? b. Assuming the price per dozen of gardenias is $20 and the application of an ounce of nutrient costs $400 per ounce, if the gardenia grower behaves in a profit maximizing manner, how many dozens of gardenias will be produced (TP) __________ ;
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This note was uploaded on 10/26/2009 for the course ECON 180-004-20 taught by Professor Bresnock during the Fall '09 term at UCLA.

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