Answer to Question #226756 in Microeconomics for Javeria Abrar

Question

Q9) Complete the table and show your calculation

No. of variable inputs Total product Marginal product Average product of

of variable input variable input

3 18 30

4 20

5 130

6 5

7 19.5

Does the production function stated in the table given above exhibit diminishing returns? If so, at what no. of units of variable inputs do diminishing marginal return begin?

Answer 1

Given 

Marginal Product = change in total product/change in variable input. 

Here change in variable input = 1. 

So, Marginal Product = change in total product. 

Average Product = Total Product/Variable input. 

Total product = Average product × variable input.

This production process exhibits diminishing returns to input variables. The marginal product of labor diminishes as workers are added, and begins when the sixth input variable is added