Answer to Question #252465 in Microeconomics for Nokky

Question

Table 1 below, shows the output of 6 machinists in the sewing section of the business on a daily basis. Use this information to explain, and illustrate numerically, the law of diminishing returns to Mrs Samuels. In your explanation, you should also refer to the marginal product and average product of the machine operators.

Answer 1

When variable factors of production are added to a stock of fixed factors of production , the total product and marginal product will initially rise and then fall

Increase in labor leads to increase in output when the marginal product is positive because their is specialization. The added laborers also use the underutilized workspace and amenities.

Similarly, when their is inadequate fixed factors of production the total product will be negative