The short-run production function for a manufacturer of DVD drives is as follows:

Number of Workers (Quantity of Labor) Total Output of DVD Drives

0 0

1 7000

2 20000

3 30000

4 36000

5 40000

6 42000

Calculate the average product (AP) at each quantity of labor.
Calculate the marginal product (MP) at each quantity of labor.
After which worker do diminishing marginal returns set in?
In the region of diminishing marginal returns, what is happening to marginal cost? Explain.

Expert Solution

a) & b) Ans:

Number of workers (Quantity of Labor)	Total Output of DVD Drives	AP	MP
0	0	--	--
1	7000	7000	7000
2	20000	10000	13000
3	30000	10000	10000
4	36000	9000	6000
5	40000	8000	4000
6	42000	7000	2000

Explanation:

AP = Total Product / Number of workers

MP = Change in Total Product / Change in Number of workers

c) Ans: After 2nd worker diminishing marginal returns sets in.

d) Ans: In the region of diminishing marginal returns, marginal cost increases. Becuase marginal product and marginal costs are inversely related.

Rahul Sunny answered 2 years ago

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Question

The short-run production function for a manufacturer of DVD drives is as follows:

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