Let's assume that a business is operating in the short run. When it uses 1 building,...

Let's assume that a business is operating in the short run. When it uses 1 building, 5 machines, and 2 workers, it produces 25 products. When it uses 1 building, 5 machines, and 4 workers, it produces 50 products. When it uses 1 building, 5 machines, and 6 workers, it produces 100 products. When it uses 1 building, 5 machines, and 8 workers, it produces 165 products. When it uses 1 building, 5 machines, and 10 workers, it produces 240 products. When it uses 1 building, 5 machines, and 12 workers, it produces 275 products. When it uses 1 building, 5 machines, and 14 workers, it produces 292 products. With the hiring of which workers does the law of diminishing marginal returns begin?

Solutions

Expert Solution

Ans: 12

Explanation:

Marginal Product of Worker = Change in Total Product / Change in number of workers

Diminishing marginal returns states that the total product increases at a decreasing rate.

With the hiring 12 workers the law of diminishing marginal returns begins.

Number of building	Number of Machine	Number of Workers	Total Products	Marginal Product of Worker
1	5	2	25	--
1	5	4	50	12.5
1	5	6	100	25
1	5	8	165	32.5
1	5	10	240	37.5
1	5	12	275	17.5
1	5	14	292	8.5

Rahul Sunny answered 2 years ago

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