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The table below represents the production function for a coffeehouse in Rochester. The number in the cells represent the number of customers that can be
The table below represents the production function for a coffeehouse in Rochester. The number in the cells represent the number of customers that can be served daily with various amounts of capital and labor. Labor (L) 1 100 132 155 1?5 190 205 2 152 200 235 264 289 310 Capitai 00 3 193 255 300 337 368 396 4 230 303 35? 400 437 470 5 263 34? 408 45? 500 538 6 293 387 455 510 558 600 Notice that the marginal product of a fth worker when rm is using 1 unit ofcapital is less than the marginal product of a fth worker if the rm is using 5 units of capital. Based on this. does this production function violate the law of diminishing marginal product of labor? @ It does not violate the law o'fdiminishing MP of labor because in the above example. we are holding labor xed. It does violate the law of diminishing MP of labor because the above example is of a shortrun production function. It does not violate the law of diminishing MP of labor because the above example is of a short-run production function. ":3 It does not violate the law of diminishing MP of labor because in the above example. we are not holding capital fixed
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