Author Question: In an unregulated competitive market, the presence of marginal external benefit from a good or ... (Read 84 times)

vicotolentino · **on:** Jun 29, 2018

In an unregulated competitive market, the presence of marginal external benefit from a good or service results in overproduction.

Indicate whether the statement is true or false

Question 2

Assume that for whatever reason there is a manufacturing firm exhibits a constant marginal product of labor over a certain range of production.

Armed with only this information what would you be able to say about the average product and total product of labor curves of this firm.

Viet Thy · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

FALSE

Answer to Question 2

The marginal product curve and the average product curve would be one and the same and would have a horizontal shape of the relevant production range. The total product function would be an upward-sloping linear function.