What is the law of diminishing marginal productivity? How does the law of diminishing marginal productivity...

What is the law of diminishing marginal productivity? How does the law of diminishing marginal productivity affect the cost of productions? Provide an example from your workplace.

Expert Solution

The law of diminishing marginal productivity states that when any one factor of production is increased, the Overall productivity of a firm increases initially but it gradually decreases as more units are added.
According to the law of diminishing marginal productivity, when more and more units of a good are added, the marginal cost of producing an extra unit of a good and the average variable cost will keep increasing due to the additional cost incurred.
This will cause the marginal cost curve to slope upwards continuously towards right.
For example :- when more and more workers are added in the workplace, the production will increase at a higher pace until a certain level is reached. This will increase the marginal cost of production.
After a certain point is reached, even when the workers are increased, the productivity level will start to increase at a slower pace and eventually decline.

Rahul Sunny answered 3 months ago

Q2. What is the law of diminishing marginal productivity? How does the law of diminishing marginal...

Q2. What is the law of diminishing marginal productivity? How does the law of diminishing marginal productivity affect the cost of productions? Provide an example from your workplace.

explain the law of diminishing marginal productivity and why the law tends to hold in the...

explain the law of diminishing marginal productivity and why the law tends to hold in the short run. which factors impact the supply curve for physicians the most? explain how each factor impacts the supply curve.

What’s the law of diminishing marginal productivity? What are the costs in the short run? What...

What’s the law of diminishing marginal productivity? What are the costs in the short run? What are the costs in the long run?

Microeconomics Marginal Productivity and the Law of Diminishing Marginal Returns You have recently been hired to...

Microeconomics Marginal Productivity and the Law of Diminishing Marginal Returns You have recently been hired to manage a movie theater. You observe that there are many customers waiting around the concession area to buy snacks. You also observe that there is only one clerk working the counter. This employee has to do everything from get the popcorn going, stocking condiments and supplies, changing the soda canister when the syrup runs out for fountain drinks, helping customers, fill orders, collect cash,...

Explain the principle of the cost of production, Diminishing Marginal Productivity , Diminishing Marginal Utility in...

Explain the principle of the cost of production, Diminishing Marginal Productivity , Diminishing Marginal Utility in microeconomics. ( minimum a paragraph for each)

Explain the law of diminishing marginal utility & the law of diminishing return.

a) explain what the law of diminishing(marginal) return means. Does it apply to the short or...

a) explain what the law of diminishing(marginal) return means. Does it apply to the short or long run? Is it only present in perfectly competitive markets? b) how does a firm operating under perfect competition know when it is maximizing its profit-in other words, what is the rule that it follows? explain in detail c) is the decision that the firm makes in part b a short or long run decision? why? explain the difference between the short and the...

What are the impacts of the law of diminishing marginal utility gained as it applies to...

What are the impacts of the law of diminishing marginal utility gained as it applies to a recent purchase of a good or service? Specifically, consider how your willingness-to-pay price was less for purchasing a second unit of a good or service based on getting less benefit from the second item you consume relative to the first? Would you respond to purchasing the second unit if it was sold at a discounted price? Do you seek to gain the same...

assuming tbat the law of diminishing marginal utility does not hold, how differently would consumers behave.

To what extend do you think law of demand depends on the law of diminishing marginal...

To what extend do you think law of demand depends on the law of diminishing marginal utility? If marginal utility was increasing when quantity of a good consumed increase, would there any change in consumer behaviour?

Question