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

Question

Quizplus · Accepted Answer

From the given information, we can calculate the marginal product of labor as the increase in total product from hiring one additional unit of labor.

Marginal product = (Change in total product) / (Change in labor input)

Here, the change in total product is 10 units (110 - 100), and the change in labor input is 1 unit.

Therefore, marginal product = 10/1 = 10 units.

Since the marginal product is positive (i.e., greater than zero), it means that hiring one more unit of labor is increasing the total product.

Suppose That When a Firm Hires One Additional Unit of Labour,total