How Apple Inc. 's Production Function

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How Apple Inc.’s Production Function relates to its Marginal Product of Labor Any firm’s production function relates to its marginal product of labour. The production function is used to explain the relationship between the quantity of the inputs used in the production process, and the firm’s production capacity in relation to other factors of production such as labour and capital. The marginal product of labour is the increase in the amount of output from an increase in unit labour supply. Therefore, the production function is given by Q=f (L, K). Taking an example of Apple Inc. Corporation, the firm usually applies the two factors of productions to come up with their final products (capital and labor). It is obvious that positive change…show more content…
That is, the firm will start experiencing the diminishing returns where the percentage increase in MPL does not equate to the percentage increase in MP. How Apple Inc. Marginal Product relates to the Demand for Labor In a normal situation, an increase in marginal demand will lead to an increase in demand for labor. That is, when the firm want to rise their marginal product, they must instill more workforce to attain their desired output. When the Apple Inc. company want to increase their marginal output to maximize profit, there must be an increase in labour force. Same case applies, when the firm want to lower their marginal products which is a rare case, they have to reduce the labor demand. Therefore, the marginal product has a direct relationship with labor demand for any corporation. Always, there has to have more inputs to attain greater output. Events that could lead to a Shift in Demand or Supply of Labor The labor price: When the labor price changes, there is a proportional change in the demand and supply for labor. For example, when the price of the labor increases the firms demand for labor shifts to the left. That is, the firm will not be able to employ high taskforce, while else, the workers will be willing to offer services at a favorable labor price. The opposite also happens. When the labor price falls, the labor supply will be low, and
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