When a firm increases its capital usage

Question

Quizplus · Accepted Answer

When a firm increases its capital usage, the total product curve can be expected to rise. This is because the addition of capital can enhance the productivity and efficiency of labor, resulting in an increase in the total output produced by the firm. However, it is important to note that there may be a point where adding more capital becomes less productive, leading to diminishing returns and a decline in the total product curve.

When a Firm Increases Its Capital Usage