As the marginal physical product of labor rises in the U.S., the marginal cost of goods produced in the U.S. rises which makes it harder for U.S. producers to compete in the global marketplace.

Question

Quizplus · Accepted Answer

The marginal physical product of labor represents the additional output generated by adding one more unit of labor. If the marginal physical product of labor rises, it means labor is becoming more productive. This increased productivity can actually lower the marginal cost of goods produced, as less labor is needed to produce the same amount of goods, potentially making U.S. producers more competitive in the global marketplace.

As the Marginal Physical Product of Labor Rises in the U.S