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    Law of diminishing marginal product

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    You are the production manager at a steel plant, where all of the capital investment has been made for the next year. The only input you control is the amount of labor, which is priced at $15 per unit. Fill in the blanks in the following table and answer the question below.

    Labor Total Marginal Average Average Short-Run
    Usage Product Product Product Variable Cost Marginal Cost
    1 _____ _____ 12 ______ ______
    2 30 _____ ______ ______ ______
    3 _____ 21 ______ ______ ______
    4 _____ _____ ______ ______ $1.00
    5 _____ _____ ______ $1.00 ______
    6 _____ 6 ______ ______ ______
    7 84 _____ ______ ______ ______

    After how many units of labor is the law of diminishing marginal product exhibited?

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    https://brainmass.com/economics/labour-economics/law-diminishing-marginal-product-365578

    Solution Preview

    Please refer attached file for better clarity of tables.

    Labor Total Product Marginal Product Average Product Average Variable Cost Short run Marginal Cost
    Usage,L Q MP AP=Q/L AVC SMC
    1 12 12 12 1.25 1.25
    2 30 18 15 1.00 0.83
    3 51 21 17 0.88 ...

    Solution Summary

    Solution explains formulas and methodology to get the missing numbers. It also determines after how many units of labor the law of diminishing marginal product is exhibited.

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