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Author Question: Explain why the marginal cost of production must increase if the marginal product of a variable ... (Read 133 times)

Awilson837

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on: Jun 29, 2018
Explain why the marginal cost of production must increase if the marginal product of a variable resource is decreasing.
 
  What will be an ideal response?

Question 2

All but one of the following have been suggested by some economists as possible consequences of path dependency and switching costs. Which of the following is not a possible consequence of path dependency and switching costs?
 
  A) diseconomies of scale
  B) market failure
  C) Consumers may get locked into using products with inferior technology.
  D) Government intervention may be necessary in affected markets in order to improve economic efficiency.
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Hdosisshsbshs

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Consider a variable input such as labor. If the marginal product of labor is decreasing it means that the output produced by each additional unit of labor hired is smaller than previous units of labor. If all workers are paid the same wage, the marginal cost of additional output each worker produces depends on the worker's marginal product. If the marginal product falls then the marginal cost of that additional output must rise.

Answer to Question 2

A


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Awilson837

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Reply #2 on: Jun 29, 2018
Correct answers!


Hdosisshsbshs

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Reply #3 on: Jun 29, 2018
Great! Please up vote :D


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