When two factors are substitutes in production,an increase in the employment of one increases the marginal product of the other.

Question

Quizplus · Accepted Answer

When two factors are substitutes in production, an increase in the employment of one factor leads to a decrease in the marginal product of the other factor. This is because as more of one factor is used, there is less need for the other factor to achieve the same level of output.

When Two Factors Are Substitutes in Production,an Increase in the Employment