To determine
To find: The value of A'(x) and the reason that why the company wants to hire more workers if A'(x)>0.
Answer
The value of A'(x) is xp'(x)−p(x)x2.
Explanation
Given:
The average productivity of the workforce at the plant is shown below with an equation.
A(x)=p(x)x (1)
Calculation:
Calculate the value of A'(x).
Differentiate equation (1) with respect to x.
Apply the quotient rule below.
(uv)'=u'v−v'uv2
Substitute p(x) for u and x for v in the above equation.
(p(x)x)=p'(x)x−(1)p(x)x2=p'(x)x−p(x)x2A'(x)=xp'(x)−p(x)x2
If the condition A'(x)>0 is true, then A(x) is increasing. For the condition A'(x)>0 to be true, the total value of production in the plant p(x) should increase. It shows that the average productivity will increase, as the size of the workforce increases. The company will be interested in hiring more workers.
To determine
To show: The condition A'(x)>0 is true, if the expression p'(x) is greater than the average productivity.
Explanation
For the given condition, p'(x) is greater than the average productivity, that is,
p'(x)>A(x) (2)
Substitute p(x)x for A(x) in the equation (2).
p'(x)>p(x)xxp'(x)>p(x)xp'(x)−p(x)>0
Multiply by 1x2 on both sides of the above equation.
xp'(x)−p(x)x2>0A'(x)>0
Here, the condition A'(x)>0 is true.
Thus, A(x) is increasing that means that the average productivity will increase as the size of the work force increases.
Hence the condition A'(x)>0 is verified, if the value of p'(x) is greater than the average productivity.