Consider a basket-producing firm with fixed capital.If the firm can produce 36 baskets per day with 3 workers and then increases productivity to 44 baskets per day with 4 workers,then which of the following statements is true?
A)The marginal product of the fourth worker is 11.
B)The firm has passed the point of diminishing average productivity.
C)The marginal product is above the average product.
D)The firm has not yet reached the point of diminishing marginal productivity.
E)With 4 workers,the firm's average product of labour is 13.

Question

Quizplus · Accepted Answer

The Answer of Consider a basket-producing firm with fixed capital.If the firm can produce 36 baskets per day with 3 workers and then increases productivity to 44 baskets per day with 4 workers,then which of the following statements is true?
A)The marginal product of the fourth worker is 11.
B)The firm has passed the point of diminishing average productivity.
C)The marginal product is above the average product.
D)The firm has not yet reached the point of diminishing marginal productivity.
E)With 4 workers,the firm's average product of labour is 13.

Consider a Basket-Producing Firm with Fixed Capital