A firm produces good Y with just 2 factors: Capital which is
fixed in supply and labour which is variable. Identify the stages
of production in the diagram and explain why the firm still hire
labour even though it is in the range of diminishing
returns.
What is the number of workers after which diminishing marginal
returns starts? Is this a short run or long run phenomenon?
Labour (units)
1
2
3
4
5
6
7
8
9
Total Product (TP) in Units
8
15
24
30
35
37
38
38
36
Average Product (AP) in units
8
7.5
8
7.5
7
6.17
5.43
4.75
4
Marginal Product
(MP) in units
8
7
9
6
5
2
1
0
-2
A Firm Produces Good Y With Just 2 Factors Capital Which Is Fixed In Supply And Labour Which Is Variable Identify The 1 (37.21 KiB) Viewed 63 times
1 2 3 5 6 7 8 00 4 30 9 36 8 15 24 35 37 38 38 Labour (units) Total Product (TP) in Units Average Product (AP) in units Marginal Product (MP) in units
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