Question

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.

Answer 1

Law of diminishing marginal productivity is an economic principle it states that while increasing one input and keeping other inputs at the same level may initially increase output, this law shows that increasing production isnot always the best way to increase profitability.this law tends to hold in the short run because only then in some factor fixed the sources of the law is that resources are not perfect substitutes only the variable input can be increased. the factors impact the supply curve for physicians are increased production costs increased government regulations by this the supply is decreased and the supply curve to the left. and the factors increasing supply and shifting the curve to the right is by decreased production costs and decreased government regulations. marginal productivity of medical care diminshes as the individual acquires more medical care then the curve negatively sloped in this marginal product of medical care diminishes as the individual acquires more medical care, by the effects of age on the health and marginal product of medical care are likely to fall rate at which health depreciated over the period is also likely to increase then the total product curve shifts downwards and flatten out and marginal product curve shifts left, lifestyle variables : personal habits the production of health adoption of healthier lifestyle cause the total product curve shift and rotate upward,.