A printing press operates in the short run with fixed machinery and equipment. The table b… — JAMB UTME

A printing press operates in the short run with fixed machinery and equipment. The table below shows the total product ( $TP$ , measured in thousands of pages) obtained as successive units of variable labor ( $L$ ) are employed:

Labor ( $L$ )	Total Product ( $TP$ )
1	15
2	38
3	54
4	64
5	70

With the addition of which unit of labor do diminishing marginal returns set in?

A
The 2nd unit of labor
The 3rd unit of laborCevap
C
The 4th unit of labor
D
The 5th unit of labor

Cevap

The 3rd unit of labor

The correct response identifies the 3rd unit of labor because marginal product (

MP

) reaches its peak at

23

units with the 2nd worker, and then decreases to

16

units with the addition of the 3rd worker. According to the Law of Diminishing Returns, diminishing marginal returns set in at the point where addition of a variable factor causes marginal product to start declining.

Adım Adım Çözüm

Calculate the Marginal Product (

MP

) for each successive unit of labor using

MP = TP_n - TP_{n-1}

MP_1 = 15 - 0 = 15

;

MP_2 = 38 - 15 = 23

;

MP_3 = 54 - 38 = 16

;

MP_4 = 64 - 54 = 10

;

MP_5 = 70 - 64 = 6

Marginal product measures the additional output generated by adding one extra unit of variable input.

Identify the point where

MP

reaches its peak and begins to decrease.

MP

increases from

15

(1st worker) to

23

(2nd worker), then drops to

16

upon adding the 3rd worker.

The Law of Diminishing Returns states that as variable units of an input are added to fixed inputs, a point is reached beyond which the additional (marginal) output starts to decline.

Determine the specific unit of labor that causes

MP

to decline.

Adding the 3rd worker causes

MP

to fall from

23

16

Diminishing marginal returns set in with the addition of the input unit that yields a lower marginal product than the preceding unit.

Anahtar Kavram

Short-Run Production and Law of Diminishing Returns

Tahmini Süre:1m 15s

Soru

Cevap

Adım Adım Çözüm

Anahtar Kavram

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