(Production in the Short Run) Complete the following table. At what point does d

Question

(Production in the Short Run) Complete the following table. At what point does diminishing marginal returns set in? Explain.             

Units of the Variable Resource            Total Product             Marginal Product            

0                                   0                                —                       

1                                  10                                10                         

2                                  22 12                    

3                                 31                                  9                           

4                                 35                                  4

5 34                                -1

Units of the

Variable Resource            Total Product             Marginal Product

0                                   0 -

1                                 10 10

2                                 22 12

3                                 31 9

4                                 35 4

5 34 –1

Explanation / Answer

Diminishing marginal returns starts from 2 units. When firm employe any unit more than 2 then its marginal returns starts declining.

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