If the marginal product of labor (MPL) increases when more labor is employed, then
A. the marginal cost (MC) increases when output increases.
B. the marginal cost (MC) does not change when output increases.
C. the marginal cost (MC) decreases when output increases.
D. Any of the above answers might be correct depending on how the average variable cost (AVC) changes when output increases.
Marginal Product of Labor:
The marginal product of labor indicates the increase in the physical units of output associated with an additional unit of labor used in production. In this calculation, other factors of production such as capital are held constant.
Answer and Explanation: 1
The answer is C).
When the marginal product of labor increases when more labor is employed, it also implies that less labor is needed to produce an...
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fromChapter 3 / Lesson 12
What is marginal cost? Learn how to calculate marginal cost with the marginal cost formula. See the definition, behavior, and marginal cost examples.