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    The quadratic production function

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    *Please describe how to calculate.

    The harvesting of coffee is characterized by a quadratic production schedule as follows:

    No. of Coffee
    Laborers harvested
    in kgms

    0 0
    1 200
    2 450
    3 620
    4 780
    5 850
    6 920
    7 950
    8 980
    9 1000
    10 950

    If the wage rate is $100 a day and the price of green coffee is $5.00 per kgm, find
    (a) the quadratic production function,

    (b) the optimum number of laborers to hire and (c) the maximum profit.

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    Solution Preview

    The quadratic production function is given by
    , (1)
    where Q = the quantity and L = number of laborers.
    The production function can be estimated by the method of least squares by solving the following normal equations:
    Where and


    Solution Summary

    The quadratic production function is applied in this case.