Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider a house construction firm with fixed capital. The firm can build 8 houses per year with 16 workers and 8.8 houses per year with
Consider a house construction firm with fixed capital. The firm can build 8 houses per year with 16 workers and 8.8 houses per year with 17 workers. If it is currently building 8.8 houses per year, which of the following is true?
a)The firm has not yet reached the point of diminishing average productivity.
b)Average product is at a maximum when the firm has 17 workers.
c)The marginal product is below the average product.
d)Average product is at a maximum when the firm has 16 workers.
e)There is insuffucient information to answer the question.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started