Which statement describes a situation in which negative returns to labor occur?
D )Explanation: The MPL {marginal product of labor} explains the change in output associated with the change in labor, keeping other factors constant. So, if MPL falls below zero then there will be negative returns to labor as increase in labor will not result in an increase of output. Therefore, right option is d).
How do new regulations affect the costs of doing business do regulations represent a fixed or variable cost or can they be both explain?
A) New regulations can increase the cost of doing business because the business owner may have to modify the production of the goods and services. New regulations decrease the cost of doing business because the regulation will not affect the way businesses produce goods and services.
When diminishing marginal returns set in total product will?
The law of diminishing marginal returns states that in any production process, a point will be reached where adding one more production unit while keeping the others constant will cause the overall output to decrease.
When there are diminishing marginal returns quizlet?
Diminishing marginal returns occur when the marginal product of an additional worker is less than the marginal product of the previous worker.
What is the rule of diminishing marginal return?
Diminishing returns, also called law of diminishing returns or principle of diminishing marginal productivity, economic law stating that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield …
What is the relationship between marginal product and total product?
Total product is simply the output that is produced by all of the employed workers. Marginal product is the additional output that is generated by an additional worker.
What will be the marginal product when total product is maximum?
When a marginal product reaches its maximum, the total product starts to increase at a diminishing rate.
What happens when the marginal product is 0?
Diminishing returns occur when the marginal product of the variable input is negative. That is when a unit increase in the variable input causes total product to fall. At the point that diminishing returns begin the MPL is zero.
What is the marginal product curve?
MARGINAL PRODUCT CURVE: A curve that graphically illustrates the relation between marginal product and the quantity of the variable input, holding all other inputs fixed. This curve indicates the incremental change in output at each level of a variable input.
What is marginal product explain with an example?
Definition: Marginal product, also called marginal physical product, is the change in total output as one additional unit of input is added to production. In other words, it measures the how many additional units will be produced by adding one unit of input like materials, labor, and overhead.
What is average and marginal product?
Marginal product focuses on the changes between production totals and the quantity of resources. Average product shows output at a specific level of input. The marginal product (MP) curve crosses the average product (AP) curve at the point where the average product curve is at a maximum.
What can you say about the relation between marginal product MP and marginal cost MC )?
Marginal cost and marginal product are inversely related to one another: as one increases, the other will automatically decrease proportionally and vice versa. Marginal product may include the additional units made by adding a single employee.
What is the relationship between marginal cost and marginal product in the short run?
Marginal cost is a reflection of marginal product and diminishing returns. When diminishing returns begin, the marginal cost will begin its rise. The MC is related to AVC and ATC. These costs will fall as long as the marginal cost is less than either average cost.
What is the relationship between marginal cost and price quizlet?
Cost is what producer gives up, price is what the producer receives. Cost of one more unit is marginal cost, marginal cost is the minimum price a firm will accept. Minimum supply price determines supply. Supply curve is a marginal cost curve.
What is the relationship between marginal cost and price?
A competitive firm equates its marginal cost to the market price of its product. The equality of marginal cost and price is a fundamental efficiency condition for the allocation of resources.
What is the relationship between marginal cost and average total cost?
Marginal cost (MC) is calculated by taking the change in total cost between two levels of output and dividing by the change in output. The marginal cost curve is upward-sloping. Average total cost (sometimes referred to simply as average cost) is total cost divided by the quantity of output.
What is the relationship between cost and production?
There is an inverse relationship between production and costs. The harder it is to produce something, for example, the more labor it takes, the higher the cost of producing it, and vice versa.