Purchase Solution

Decreasing Productivity and Increasing Costs

Not what you're looking for?

Ask Custom Question

What is the relationship between diminishing marginal productivity and increasing marginal costs? Give examples.

Purchase this Solution

Solution Summary

Detailed explanation, with numerical examples, of why marginal costs increase as marginal productivity decreases are provided.

Solution Preview

Productivity is the amount of output produced by a single unit of input. For example, if your business produces shirts, one of your inputs is labour. If you have 10 workers and they produce a total of 200 shirts per day, your business' productivity is 20 shirts per worker.
Marginal productivity is the additional output obtained from increasing an input. If you add one more worker and your total output increases to 220 shirts per ...

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.