Question

Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor?

Answer 1

Answer:

The value of average product of labor = 5 K

Step-by-step explanation:

Total number of cups generated q = 5 KL

Where q = the number of cups generated per hour

K = The number of coffee machines (capital)  

L = the number of employees hired per hour (labor)

The average product of labor = $\frac{Total number of cups generated }{The number of employees hired per hour (labor)}$

⇒ The average product of labor = $\frac{5 KL}{L}$

⇒ The average product of labor = 5 K

This is the value of average product of labor.