Chapter 22: Q. 2 (page 507)

The short-run production function for a manufacturer of portable power banks is shown in the table below. Based on this information, answer the following questions.

a. Calculate the average product at each quantity of labor.
b. Calculate the marginal product of labor at each quantity of labor.
c. At what point does marginal product begin to diminish?

Short Answer

Expert verified

a. Average physical product declines thanks to a rise within the number of labor inputs.

b. Marginal physical product diminishes because of a rise within the inputs of labor.

c. Marginal product diminishes to $25$ .

Step by step solution

Introduction

The short run is defined as a period frame within which wage levels of other inputs are "sticky," or unyielding. While product prices (i.e. prices of materials used to create more products) are even more controlled by huge contracts and begin to express, product pricing (i.e. product prices purchased by customers) are more adjustable.

While product prices (i.e. prices of materials used to create more products) are even more controlled by huge contracts and begin to express, product pricing (i.e. product prices purchased by customers) are more adjustable.

Explanation

(a) Average physical product is calculated by considering total output at each point and inputs of labor.within the above table, average physical product is calculated at each point. Average physical product declinesthanks to a rise within the number of labor inputs.

Given Information (b)

(b) The short-run production function for a manufacturer of portable power bank.

Explanation (b)

(b) Marginal physical product is measured by considering addition tothe full output withreference to a rise within the inputs of labor.within the above table, marginal physical product diminishesbecause of a rise within the inputs of labor.

Given Information (c)

Explanation (c)

(c) Marginal product starts diminishing at the purpose of three inputs of labor. Marginal product is $35$ when $2$ inputs of labor are used, and when $3$ inputs of labor are used, marginal product diminishes to $25 .$