Asked by Nimah Siddiqui on May 26, 2024
Verified
In a certain textile firm, labor is the only short term variable input. The manager notices that the marginal product of labor is the same for each unit of labor, which implies that:
A) the average product of labor is always greater that the marginal product of labor.
B) the average product of labor is always equal to the marginal product of labor.
C) the average product of labor is always less than the marginal product of labor.
D) as more labor is used, the average product of labor falls.
E) there is no unambiguous relationship between labor's marginal and average products.
Marginal Product
The additional output that is produced by adding one more unit of a variable resource, such as labor or capital, to the production process.
Average Product
The output produced per unit of a factor of production, calculated by dividing total product by the quantity of the input.
Textile Firm
A textile firm is a company that specializes in the production and distribution of fabrics and fabric-based products.
- Comprehend the nuances of production functions and engage in calculating the marginal and average product of labor.
Verified Answer
NM
Natalia MalecJun 02, 2024
Final Answer :
B
Explanation :
When the marginal product of labor is the same for each unit of labor, it means that the total output is increasing at a constant rate as each unit of labor is added. This also means that the average product of labor is equal to the marginal product of labor. Therefore, choice B is the correct answer.
Learning Objectives
- Comprehend the nuances of production functions and engage in calculating the marginal and average product of labor.