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Short-Term or Long-Term Diminishing Marginal Productivity

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Do you think diminishing marginal productivity is a short term phenomenon, a long term phenomenon or both?

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Solution Summary

Discusses short-term and long-term diminishing marginal productivity.

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Diminishing rate of marginal productivity (DRMP) is short term phenomenon. Its long term effect is not so obvious.

If you check my previous answers to your questions, I have used examples about making sandwichs and completing math problems to show you that in the short run, DRMP has a significant effect on productivity. This is because a producer cannot adjust other factors of input. Let us say you have a factory and the most optimal production rate is 1 worker per ...

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