FIGURE 7- 1
-Refer to Figure 7- 1. If the firm hires the 15th unit of labour,
A) the extra output will be zero.
B) average product will fall.
C) marginal product will be unchanged.
D) the firm will reach its capacity.
E) both A and B are correct.

Question

FIGURE 7- 1
-Refer to Figure 7- 1. If the firm hires the 15th unit of labour,
A) the extra output will be zero. 
B) average product will fall. 
C) marginal product will be unchanged. 
D) the firm will reach its capacity. 
E) both A and B are correct.

Quizplus · Accepted Answer

The extra output will be zero because the marginal product of the 15th unit of labor is zero, and average product will fall as adding more labor without increasing output decreases the average.

FIGURE 7- 1 -Refer to Figure 7- 1. If the Firm Hires the Firm