The following data show the total output for a firm when different amounts of labour are combined with a fixed amount of capital.Assume that the wage per unit of labour is $10 and the cost of the capital is $50. TABLE 7- 3
-Consider a basket- producing firm with fixed capital.If the firm can produce 24 baskets per day with 3 workers and then increases production to 36 baskets per day with 4 workers,then which of the following statements is definitely true?
A) The firm has passed the point of diminishing average productivity.
B) With 4 workers,the average product is greater than the marginal product.
C) The firm has passed the point of diminishing marginal productivity.
D) With 4 workers,the marginal product is greater than the average product.
E) The marginal productivity of the fourth worker is 9.
Correct Answer:
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