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Unformatted text preview: o Increasing marginal returns When marginal product of additional worker exceeds the marginal product of the previous worker The ttl amount produced increases and the production per worker increases too o Decreasing marginal return When Marginal product of an additional worker is less than the marginal product of the previous worker Total amount produced increases, but marginal product decreases o Negative marginal returns Is when additional person decreases the amount of quantity produced o Type of return is determined by the slope of the total product line Law of diminishing returns: o As more units of a variable resource are added to a fixed resource, the marginal product of the variable resource will eventually decline o Average product: the general productivity of each worker Total product/ quantity of labor...
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- Fall '09
- Economies Of Scale