Suppose that when one additional unit of labour is hired, total product increases from 100 to 110 units of output per month. Marginal product must therefore be
A) constant.
B) positive.
C) zero.
D) decreasing.
E) increasing.

Question

Quizplus · Accepted Answer

Marginal product is the additional output produced when one more unit of input (in this case, labor) is added, ceteris paribus. Since hiring an additional unit of labor results in an increase in total product from 100 to 110 units, marginal product must be positive.

Suppose That When One Additional Unit of Labour Is Hired