One would expect to observe a diminishing marginal product of labor when crowded office space reduces the productivity of new workers.

Question

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Diminishing marginal product of labor occurs when the addition of a new worker causes a smaller increase in output than previous additions. This can happen when resources, such as office space or equipment, become increasingly crowded, leading to reduced productivity for each new worker. Therefore, one would expect to observe a diminishing marginal product of labor in this situation.

One Would Expect to Observe a Diminishing Marginal Product of Labor