Brighton Pier Ice Cream Ltd: Producing Delicious Ice Cream with Joy

What is the marginal product of labour (MPL) for Brighton Pier Ice Cream Ltd?

Marginal Product of Labor (MPL)

The production function for scoops of ice cream for Brighton Pier Ice Cream Ltd. is given by f(KL) = K^0.5 * L^0.5. The cost of renting an ice cream machine is £50, and the cost of a worker for one day is £50. We are supposed to find the marginal product of labor (MPL).

Explaining Marginal Product of Labor (MPL)

The formula for the marginal product of labor (MPL) is given by: MPL = ∂f(K,L)/∂L. The production function can be written as: f(K,L) = K^0.5 * L^0.5. Differentiating with respect to L, we get: MPL = ∂f(K,L)/∂L = (0.5)*K^0.5 * L^(-0.5) = 0.5*K^0.5 / L^0.5. Therefore, the marginal product of labor (MPL) is 0.5*K^0.5 / L^0.5.

Brighton Pier Ice Cream Ltd sells ice cream on the Brighton pier. To produce ice cream, the company needs capital (one or more ice cream making machines, K), and labour (workers to run the machine, L). Its production function for scoops of ice cream is f(KL) = K^0.5 * L^0.5.