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A furniture manufacturer is producing in the short run with one fixed input, capital. The manufacturer has recorded the following levels of units output corresponding
A furniture manufacturer is producing in the short run with one fixed input, capital. The manufacturer has recorded the following levels of units output corresponding to different numbers of units if labour.
Number of units of Labor | Number of units of Output | AP(L) | MP(L) |
1 | 10 | ||
2 | 18 | ||
3 | 24 | ||
4 | 28 | ||
5 | 30 | ||
6 | 28 | ||
7 | 25 |
- Calculate the marginal and average product of labor for this production function. (5 points)
- Does this production function exhibit diminishing returns to labor? Explain. (2.5 points)
- Explain what might cause the marginal product of labor to become negative. (2.5 points)
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