In a Cobb-Douglas production function, the marginal product of labour will increase if:
A)the quantity of labour increases.
B)the quantity of capital increases.
C)capital's share of output increases.
D)average labour productivity decreases.

Question

Quizplus · Accepted Answer

The marginal product of labor increases when the quantity of capital increases because more capital makes labor more productive, assuming diminishing returns have not set in.

In a Cobb-Douglas Production Function, the Marginal Product of Labour