Complete the table directly below by calculating marginal product and average pr
ID: 1200714 • Letter: C
Question
Complete the table directly below by calculating marginal product and average product. Explain why marginal product first rises, then declines, and ultimately becomes negative. What bearing does the law of diminishing returns have on short-run costs? Be specific.
Inputs of
labor
Total
product
Marginal
product
Average
product
0
1
2
3
4
5
6
7
8
0
13
34
51
65
74
80
83
79
Complete the table directly below by calculating marginal product and average product. Explain why marginal product first rises, then declines, and ultimately becomes negative. What bearing does the law of diminishing returns have on short-run costs? Be specific.
Inputs of
labor
Total
product
Marginal
product
Average
product
0
1
2
3
4
5
6
7
8
0
13
34
51
65
74
80
83
79
Explanation / Answer
MP first rises because the fixed capital gets used more productively as added workers are employed. Each added worker contributes more to output than the previous worker because the firm is better able to use its fixed plant and equipment. As still more labor is added, the law of diminishing returns takes hold. Labor becomes so abundant relative to the fixed capital that congestion occurs and marginal product falls. At the extreme, addition of labor so overcrowds the plant that the marginal product of still more labor is negative—total output falls.
The law of diminishing marginal returns means that the productivity of a variable input (such as labor) declines as more is used in short-run production, holding one or more inputs fixed. If the productivity of a variable input declines, then more is needed to produce a given quantity of output, which means the cost of production increases, and a higher supply price is needed.
Labor TP MP AP 0 0 0 0 1 13 13 13 2 34 21 17 3 51 17 17 4 65 14 16.25 5 74 9 14.80 6 80 6 13.33 7 83 3 11.85 8 79 -4 9.87Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.