Diminishing Marginal Returns vs Tech Substitution

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  353650 Price change and substitution vs income effect; the principle of diminishing marginal utility explained; and the relationship between the ratio of marginal utility and the price of each good consumed in consumer equilibrium. 1) Explain how a price

• law of diminishing marginal returns and the law of diminishi

  58962 Law of diminishing marginal returns and the law of diminishing marginal rate of technical substitution Explain the difference between the law of diminishing marginal returns and the law of diminishing marginal rate of technical substitution?

• production function discussed

  Diminishing returns to a single factor, or diminishing MP, are observable in all production processes at some level of inputs. This fact is so pervasive that economists have named it the "law of diminishing marginal productivity."

• Justifications for downward sloping demand curve

  In the long run, diminishing marginal returns can still be a factor if certain inputs are limited, such as land or highly skilled labor. Firms maximize their profit when marginal revenue equals marginal cost (assuming perfect competition).

• The marginal product of labor

  Also, if a company increases its usage of all inputs by 100% and output increases by less than 100%, is the company's production function exhibiting a decreasing returns to scale, diminishing marginal returns, decreasing marginal rate of technical substitution

• Technology and Production Functions

  You might think that when a production function has a diminishing marginal rate of technical substitution of labour for capital, it cannot have increasing marginal products of capital and labour.

• Lagrangian Multiplier

  e) What is the value of the marginal rate of technical substitution for labor and capital at the optimal point? f) Is there diminishing marginal productivity for labor and capital? Explain g) Are there increasing returns to scale? Explain 2.

• diminishing marginal utility

  We first show that a diminishing marginal rate of substitution does not imply diminishing marginal utilities by providing a counter example.

• The marginal product of labor

  The average product of labor would be increasing at a slower rate when diminishing returns sets in. But, it would still be well above the marginal return per worker, as it would include all the productivity before diminishing returns set it.