If the capital stock remains fixed while the supply of labor increases, it is likely that:

Question

Quizplus · Accepted Answer

When the supply of labor increases but the capital stock remains fixed, the average product of labor (output per worker) will likely fall. This is because the amount of capital available to each worker has decreased, meaning each worker has less equipment or resources to work with, which in turn reduces their output. The marginal productivity of labor (the additional output from adding one more worker) may or may not change depending on the specific production function.

If the Capital Stock Remains Fixed While the Supply of Labor