Staci's Sign Shoppe makes signs for businesses. Staci is currently producing 210 signs per week with...

Staci's Sign Shoppe makes signs for businesses. Staci is currently producing 210 signs per week with three employees. Staci hires an additional worker and total output per week rises to 292 signs. At four workers, marginal product is _____ the average product; thus, average product is _____.

below; rising

equal to; unchanged

above: falling

above; rising

Solutions

Expert Solution

Solution:

Marginal product is the additional output produced by employing an additional worker. So, marginal product of 4th employee = 292 - 210 = 82 signs

Average product = total product/number of employees = 292/4 = 73 signs

As marginal product is above the average product (82 > 73), average product must be rising.

Thus, the correct option is (D) above; rising.

Rahul Sunny answered 1 year ago

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