Purchase Solution

Average vs marginal productivity

Not what you're looking for?

Ask Custom Question

What is average productivity? What is marginal productivity? Explain the relationship between marginal and average productivity. What would happen to marginal and average productivity if a technological innovation is introduced to the production process? Provide examples (numerical and graphical if you can) to explain your answer.

What is the law of diminishing marginal productivity? Give an example from your workplace of the law of diminishing marginal productivity? Might diminishing marginal productivity impact the costs?

Purchase this Solution
Solution Summary

Detailed description of how average and marginal productivity differ. The relationship of productivity is discussed.

Solution Preview

Average productivity is found by dividing total output by the number of workers. Marginal productivity on the other hand describes how much additional output the last worker has produced. As each worker produces more, average productivity increases. When marginal productivity is falling, average productivity will decline as well. However, average productivity does not change as quickly as marginal productivity because the last worker's effect on total output is combined with all previous workers', diluting its effect.

What would happen to marginal and average productivity if a technological innovation is introduced to the production process? Provide examples (numerical and graphical if you can) to explain your answer

Technological innovation will ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • What is average productivity? What is marginal productivity?

    496467 What is average productivity? What is marginal productivity? What is average productivity? What is marginal productivity? Explain the relationship between average and marginal productivity.

  • Production function and technology

    When this is done, the average total average cost curve intersects the marginal cost curve at the point where average cost is lowest. Firms maximize profit by producing at this output level, because it cannot dictate prices.

  • Relationship between average and marginal productivity

    "Where marginal product exceeds average productivity, average productivity rises. And where marginal productivity is less than average productivity, average productivity declines when the variable input increases.

  • Marginal and average productivity: technological innovation

    When marginal productivity is less than average productivity, the labor average productivity can drop (The Relationship between Marginal and Average and Economies of Scale).

  • Economics

    226674 What is the relationship between average and marginal productivity? What is the relationship between average and marginal productivity? b) How do changes in average and marginal productivity affect the cost of production?

  • Production Exercise

    Graph the average variable cost curve and show it is an approximate mirror image of the average productivity curve. 2. Graph the marginal cost and marginal productivity curves. Show that they are approximate mirror images of each other. 3.

  • Marginal productivity discussion

    When average productivity rises, it means the company is producing more with the same amount. When it falls, both marginal costs and average costs must increase, although they will increase at different rates.

  • Capital Investment vs. College Education

    Capital investment such as machinery and equipment to enhance the productivity of labor can increase the marginal product of labor.

  • Relationships between production and cost

    the relationships among total, average, and marginal costs.

View More Related Solutions