3.Using the following table, at what points do diminishing marginal returns begin? Show your computation. Points a b с d e f Units of Labor (L) 0 1 2 3 4 5 6 Total Product (Quantity/day) O 27 62 95 122 126 125
Copyright © 2024 EHUB.TIPS team's - All rights reserved.
Answers & Comments
Verified answer
Answer:
According to the table, we can calculate the marginal product of each additional unit of labor by finding the difference in total product between each level of labor.
Units of Labor (L) Total Product (Quantity/day) Marginal Product
O 27
1 62-27=35
2 95-62=33
3 122-95=27
4 126-122=4
5 125-126=-1
The point of diminishing marginal returns is where the marginal product of labor decreases with each additional unit of labor. In this table, we can see that diminishing marginal returns begin at point "c" where the marginal product of labor decreases from 35 to 33.