A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.

Question

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.
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Quizplus · Accepted Answer

The marginal productivity of labor decreases as the number of workers increases from 5 to 7, indicating diminishing marginal productivity. From 5 to 6 workers, output increases by 5 units, but from 6 to 7 workers, it increases by only 3 units, showing a decrease in the additional output per worker.

A Firm Produces 60 Units of Output with 5 Workers