If the marginal physical product of the fourth acre of land used were 10,the MPP of the fifth acre were 6,the MPP of the sixth acre were 2,the MPP of the seventh acre were 0,and the MPP of the eighth acre were -3,what is the maximum number of acres of land that would be used?

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that the marginal physical product (MPP) will decrease as more units of a variable input (in this case, land) are added to a fixed input (other resources like labor and capital). When MPP is positive, it means that adding another unit of land will increase output. However, when MPP is negative, adding another unit of land will actually decrease output.

In this scenario, the MPP of the fourth acre is positive (10) and the MPP of the fifth acre is still positive but decreasing (6). After the fifth acre, MPP becomes negative or zero, indicating that adding more land will decrease or not increase output. Therefore, the maximum number of acres that should be used is when MPP is still positive, which is five acres. Using more than five acres of land would result in diminishing returns and decreasing output.

If the Marginal Physical Product of the Fourth Acre of Land