The law of diminishing marginal returns states: Select one: a. As a firm uses more of a variable factor of production, total product (TP) eventually decreases. b. As the size of a plant increases, marginal product (MP) eventually decreases. c. As a firm uses more of a variable factor of production, its average cost (AC) eventually decreases. d. As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the MP of the variable factor eventually decreases.

Q: Explain in words why the Law of Diminishing Marginal Returns implies that there are increasing…

A: Law of diminishing marginal returns states that, as the production is continuous using factor of…

Q: Explain how a firm can have constant returns to scale in production and economies of scale in cost.

A: Constant Returns to scale refers to the situation where with the change in the production, the cost…

Q: In a short-run production process, a diminishing marginal product of labor explains why marginal…

A: Marginal Product of Labor:  The term marginal product of labor shows that how much additonal or…

Q: In a short-run production process, a diminishing marginal product of labor explains why marginal…

A: Diminishing Marginal product means that the increase in the output from the additional labor…

Q: Average total cost, average variable cost marginal cost and marginal product b. The relationship…

A: Average Total Cost or Average Cost is the total cost (TC) divided by the number of units produced…

Q: Among the three stages of production, until what point should one produce considering the law of…

A: The law of diminishing marginal product explains the three stages of production that is applicable…

Q: 1. A firm producing hockey sticks has a production function given by q = 2Vkl The price of labor is…

A: Given information q=2KL Price of labor=W Price of capital=V Short run cost function SC=Wq24K1+VK1…

Q: Draw an example of the Total Fixed Cost, Total Variable Cost, and Total Cost of a company whose…

A: Total Cost: The term total cost refers to the sum of all the costs that are used in the production…

Q: Which of the following is true of fixed costs?   a. Fixed costs can be changed, but it is…

A: Fixed costs are those that do not change with changes in the output level produced. They are the…

Q: shoes (Q) irm producing car labor. The price of K is $8 and the price of L is $2. production vhere K…

A: A firm producing cars. The production function for shoes is :        Q= K1/2 L1/2 .…

Q: The marginal cost curve intersects the average total cost curve at the level of output where average…

A: Marginal Cost (MC): Marginal cost occurs when producing an extra unit of output. Average total cost…

Q: Which of the following statements about average product and marginal product is correct? (A) If…

A: Average product is the total product which is produced divide by the total number of variable inputs…

Q: Diminishing marginal product explains why, as a firm’s output increases.a. the production function…

A: Diminishing marginal product implies as more and more units of a given factor of production are…

Q: Explain fully the law of diminishing returns. Does this occur in the short run or the long run? How…

A: In economics, the short run is a time period where atleast one factor of production is fixed while…

Q: Discuss the connection between returns to scale and diminishing marginal product. Provide graphs to…

A: Definitions In the short run, increasing input after reaching maximum capacity while keeping at…

Q: 7. The following is a production function. 2,000 1,000 100 300 Units of labor (L) a. Draw a graph of…

A: In the production process, different inputs are used to produce the final output. The inputs are…

Q: Explain how the stages of production are determined. Give information about the shape and slope of…

A: A production function shows the unique relationship between inputs and outputs. It shows the maximum…

Q: 35) What is the firm’s efficient scale?  A. the quantity of output that minimizes average total…

A: (35)  A firm's efficient scale implies the production of output such that it minimizes the average…

Q: Suppose a chair manufacturer is producing in the short run (with its existing plant and equipment).…

A: a. The marginal and average product of labor can be calculated as follows: Thus, both marginal and…

Q: 2.1 The following table gives total output or total product as a function of labor units used. Labor…

A: The process in which inputs are combined in order to produce or make something to be used as an…

Q: 37) If production displays economies of scale, the long-run average cost curve is A) above the…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: Figure 2 shown below depicts a production function for a firm that produces cookies. As the number…

A: Here, the given graph shows the production function of a firm with output on Y-axis and labor input…

Q: Chapter 11 Production and Costs – Units of Total Marginal Product Total Variable ATC AVC MC Labor…

A: The law of diminishing marginal return that when more and more variables factors are added with…

Q: A. Graph total fixed cost, total variable cost and total cost B. Explain how the law of diminishing…

A: Answer A. TVC + TFC = TC Both TC and TVC run in concurrently. The x-axis of TFC is parallel. At zero…

Q: Question 3:  The data in the table below represents Total product (TP), for an agri-business…

A: Here the capital is fixed and Labour is increasing which means the production function is in the…

Q: Discuss the Law of Diminishing Returns.

A: The Law of Diminishing Returns is also called the law of the variable proportion

Q: In a short-run production process, a diminishing marginal product of labor explains why marginal…

A: Diminishing Marginal product means that the increase in the output from the additional labor…

Q: 4. A firm producing cars. The production function for shoes (Q) is: Q = K"² L"² where K is capital…

A: Answer -

Q: Economics students often confuse (a) diminishing returns related to the variable factors of…

A: The return to scale and economies of scale are two different concepts.  The law of diminishing…

Q: A firm has the production function f(x, y) = x³yº.3, where a>0.7. This firm has Select one: O a.…

A: Given  Production function : f(x,y) = x^a × y^0.3 , where a>0.7. To check whether it has what…

Q: 4. Which situation below describes the increasing returns stage of the production function? a.…

A: Increasing return stage means the production increases more than the increase in input…

Q: which of the following statements about the short-run production is true   A. Total product starts…

A: We have to find true statement of short run production function.

Q: In the short run, which of the following costs will not change as output changes? marginal cost.…

A: A short run is a period of time in which at least one input is fixed and the others are variable. It…

Q: occurs when the marginal product of an additional worker exceeds the marginal product of the…

A: Marginal product of an additional worker is the change in output resulting from one additional…

Q: 2. A firm has a production function given by the following table: Units of Labor 1 2 3 4 5 K=1 3 8…

A: Diminishing marginal returns occur when an increase in Labor led to increasing in output at…

Q: Activity: My Production! A. Production Function Directions: Below is the production schedule for…

A: The production function of the firm shows the maximum amount of output a firm is able to produce by…

Q: Average fixed cost, average total cost a -Why does average fixed cost continuously fall as output…

A: Average fixed cost- It is the cost that is per unit of Total fixed cost. AFC=TFCQ Average total…

Q: Is the below statement correct or incorrect? Explain Briefly. If average product is negative,…

A: Marginal product is the additional output that is produced when one more unit of the variable input…

Q: What is the difference between decreasing returns to scale and diminishing marginal product?

A: Meaning of Law of Variable Proportions: The term law of variable proportions refers to the…

Q: Give relation between average product and marginal product.

A: Average Product is the total product per unit of output. Average Product =Total ProductOutput…

Q: 1- The following table gives total output or total product as a function of labor units used. Labor…

A:

Q: Number of Plants (K) Number of Workers (L) Total Production (Y) Marginal Product of Labour…

A: The total cost of the firm shows the monetary value of the inputs used by the firm in the production…

Q: Refer to the table below. How will the marginal cost curve look like if you draw it? Units of…

A: MC = change in TC / change in units With MC remains constant with increase in output, MC curve is…

Q: How would each of the following affect average total cost, average variable cost, and marginal cost?…

A: GIVEN  How would each of the following affect average total cost, average variable cost, and…

Q: Problem -2: The following table gives total output or total product as a function of labor units…

A: Diminishing returns occur when after addition of certain units of input,total product starts to…

Factors of Production

Factors of production – in simple words means the factors that are used for producing any product or service. This includes the resources which are necessary for the manufacturing of products. Factors of production are also known as the building blocks of the economy.