Question

The law of diminishing marginal returns in a manufacturing plant of a fixed capacity implies that, eventually, employing rev: 06_26_2018 Multiple Choice one more worker will increase the average product per worker. one less worker will decrease the average product per worker. one more worker will decrease the average product per worker. one less worker will not affect the average product per worker.

Answer 1

Answer:

one more worker will decrease the average product per worker.

Explanation:

The law of diminishing returns says as more units of a variable input is added to a fixed income of production, output might increase at a point but after some time total output would increase at a decreasing rate and marginal product would be decreasing.

Imagine a farmer who hires 1 unit of labour to work his farm. he notices that one unit isn't enough to work the farm, so he increases the unit of labour to 5. due, to this the amount of work done by labour increases. imagine the farmer continues to increase the amount of labour on the farm. at a point the farm would be overcrowded. there might not be machinery available for the extra units of labour to work with. as a result of this, labour would not do any work. labour would just resume on the farm and lounge through the day. thus, this extra units of labour aren’t producing anything. his marginal product is zero. imagine the farmer hires one more unit of labour. this new labour would not add anything to total output because the farm is over saturated with labour.