ECN 104 Lecture Notes - Average Variable Cost, Diminishing Returns, Marginal Product
19 Mar 2013
School
Department
Course
Professor
Document Summary
Complete the following table by finding the average and marginal product. With equal pay for each worker, average variable cost will begin to rise for the third worker"s output because that is the point where diminishing returns begin. The table below shows the total production of a firm as the quantity of labour employed increases. The quantities of all other resources employed are constant. Compute the marginal and average products and enter them in the table. Marginal average product product of labour of labour. 30 (a) there are increasing returns to labour through the third worker hired. Decreasing returns to labour set in with the fourth worker. (b) where total product increases at an increasing rate, marginal product rises (from 0 to 65). Where total product is increasing at a decreasing rate, marginal product is positive but falling (from 65 to 5).
