Question

Assume that we have a production process that exhibits increasing and then decreasing marginal productivity. That​ is, as we increase​ output, the marginal product of labor starts at some level above​ zero, rises to a​ maximum, and then eventually falls to zero. Determine whether the following statement is​ true:

Answer 1

Explanation:

Assume that we have a production process that exhibits increasing and then decreasing marginal productivity. That is, as we increase output, the marginal product of labor starts at some level above zero, rises to a maximum, and then eventually falls to zero. The following given statement is very true as we know when marginal product is above average product, average product is rising. Increasing marginal returns implies the marginal product is growing and because the medium product certainly begins at zero (zero composition implies zero average outcomes), marginal product reclines above-average product furthermore causes it to grow also. Including the onset of diminishing marginal returns and marginal product slumps.