0
When the marginal product of the variable input begins to decrease total product also begins to decrease?
When the marginal product of a variable input starts to decline, it indicates that each additional unit of that input contributes less to overall output. However, total product may not immediately decrease; it can still increase at a slower rate. Total product only begins to decrease when the marginal product turns negative, meaning additional input actually reduces overall output. Thus, a decline in marginal product signals diminishing returns, but not necessarily a decrease in total product until a further threshold is crossed.
What else can I help you with?
When is average product at its maximum?
The average product (AP) is at its maximum when the marginal product (MP) equals the average product. This point occurs because, before reaching the maximum, the marginal product is greater than the average product, which pulls the average up. Once the marginal product falls below the average product, it begins to pull the average down. Thus, the maximum average product occurs at the point where MP intersects AP.
What are the relationship between marginal cost and average total cost schedule?
Marginal cost is the cost incurred in producing an additional unit of a product. It is the cost per unit of a product as against the total cost. It is therefore the variable cost of producing one more unit of a product.Average total cost is the total cost of production at an activity level. it is the total cost of divided by the total production.Whiles marginal cost shows the cost incurred in producing an additional unit of a product, average cost shows the total cost of production per unit.Just a small addition to this thought:Think of the marginal cost as being at a point in time, whereas the average total cost is calculated over a period of time. As a result, marginal cost at any given point may be higher or lower than an average total cost.Quick example:ABC manufactures a product they call Widget AWidget A sells for a price of $20ABC sells 1,000 units of Widget AFixed costs for this production run are $5,000, regardless of # of units soldVariable costs are $12 per unitGross Revenues $20,000Fixed Cost Expense $ 5,000Variable Cost Expense $12,000Gross Profit $ 3,000Breakeven # of units can be calculated as follows:20x = 5000 + 12x. Solving for x gives 625 units to break even. At this point the Average Transaction Cost equals the selling price of $20 per unit. As each additional unit is produced the ATC will decrease since the only additional cost is the variable cost of $12 per unit. Therefore, in this very simple example, the MARGINAL COST of producing each unit OVER 625 would be the $12 variable cost expense. In the example above, at 1,000 units the Average Transaction Cost is $17 ($5 per unit for Fixed and $12 per unit for Variable), which is a decrease from the $20 ATC at break even.
What will be maximum at a point of inflexion in the law of variable proportions?
At a point of inflexion in the law of variable proportions, the maximum output or productivity of a factor of production occurs when the marginal product of that factor begins to decline. This point indicates a shift in the relationship between input and output, where the addition of more of a variable input (while keeping others constant) leads to diminishing returns. Consequently, the total product curve changes from increasing at an increasing rate to increasing at a decreasing rate, highlighting the transition in production efficiency.
Explain the pattern of marginal product?
The pattern of marginal product refers to the change in output resulting from the addition of one more unit of input, typically labor, while keeping other inputs constant. Initially, as more units of input are added, the marginal product tends to increase due to improved efficiency and specialization. However, after reaching a certain point, the marginal product typically begins to decline, a phenomenon known as diminishing marginal returns, where each additional unit of input contributes less to overall output. This pattern highlights the balance between resource allocation and production efficiency in the short run.
What are the benefits of Marginal cost?
At first, marginal cost decreases due to specialization of workers. Then, MC begins to increase steadily. The only benefits of MC are in the period of specialization.
What is the relationship between marginal productivity and marginal cost?
The marginal product curve is 'n' shaped because of the law of diminishing returns. As you add more units of a variable factor, at first, the marginal product rises, (this is because the fixed factor is under-utilised, so adding more units of the variable factor will increase the output from each additional unit). But after a certain point, the marginal product begins to fall, as the fixed factor input becomes diluted amongst workers and so you get less from each additional unit of the variable factor. For an example, re-read the above paragraph and replace the word variable factor with labour and fixed factor with capital. The marginal cost curve is the inverse of the marginal product curve - hence it is shaped like a 'u' or a 'Nike tick'. This is because if your marginal product is high - then your marginal costs are low. For example, if a firm must pay electricity for the time it takes to produce a unit, if the firm can produce the unit quicker (i.e. has a high marginal product) then the cost of electricity will be lower. Hence the inverse relationship between marginal cost and marginal product.
When is average product at its maximum?
The average product (AP) is at its maximum when the marginal product (MP) equals the average product. This point occurs because, before reaching the maximum, the marginal product is greater than the average product, which pulls the average up. Once the marginal product falls below the average product, it begins to pull the average down. Thus, the maximum average product occurs at the point where MP intersects AP.
What are the relationship between marginal cost and average total cost schedule?
Marginal cost is the cost incurred in producing an additional unit of a product. It is the cost per unit of a product as against the total cost. It is therefore the variable cost of producing one more unit of a product.Average total cost is the total cost of production at an activity level. it is the total cost of divided by the total production.Whiles marginal cost shows the cost incurred in producing an additional unit of a product, average cost shows the total cost of production per unit.Just a small addition to this thought:Think of the marginal cost as being at a point in time, whereas the average total cost is calculated over a period of time. As a result, marginal cost at any given point may be higher or lower than an average total cost.Quick example:ABC manufactures a product they call Widget AWidget A sells for a price of $20ABC sells 1,000 units of Widget AFixed costs for this production run are $5,000, regardless of # of units soldVariable costs are $12 per unitGross Revenues $20,000Fixed Cost Expense $ 5,000Variable Cost Expense $12,000Gross Profit $ 3,000Breakeven # of units can be calculated as follows:20x = 5000 + 12x. Solving for x gives 625 units to break even. At this point the Average Transaction Cost equals the selling price of $20 per unit. As each additional unit is produced the ATC will decrease since the only additional cost is the variable cost of $12 per unit. Therefore, in this very simple example, the MARGINAL COST of producing each unit OVER 625 would be the $12 variable cost expense. In the example above, at 1,000 units the Average Transaction Cost is $17 ($5 per unit for Fixed and $12 per unit for Variable), which is a decrease from the $20 ATC at break even.
What will be maximum at a point of inflexion in the law of variable proportions?
At a point of inflexion in the law of variable proportions, the maximum output or productivity of a factor of production occurs when the marginal product of that factor begins to decline. This point indicates a shift in the relationship between input and output, where the addition of more of a variable input (while keeping others constant) leads to diminishing returns. Consequently, the total product curve changes from increasing at an increasing rate to increasing at a decreasing rate, highlighting the transition in production efficiency.
Explain the pattern of marginal product?
The pattern of marginal product refers to the change in output resulting from the addition of one more unit of input, typically labor, while keeping other inputs constant. Initially, as more units of input are added, the marginal product tends to increase due to improved efficiency and specialization. However, after reaching a certain point, the marginal product typically begins to decline, a phenomenon known as diminishing marginal returns, where each additional unit of input contributes less to overall output. This pattern highlights the balance between resource allocation and production efficiency in the short run.
What is the explanation for the law of variable proportions?
The law of variable proportions or diminishing returns has been stated by Bentham in the following manner."As the proportion of one factor in a combination of factors is increased, after a point, first the marginal and then the average production of that factor will diminishing".The behaviour of output as a result of change in the proportion of variable factors to the fixed factor can be studied through three stages.Assumptions of the Law:The state of technology is assumed be given and unchanged.The law specially operates in the short run because some factors are fixed and the proportion between factors is disturbed.Variable factor units are homogeneous or identical in amount and quality.The law is based on the possibility of varying the proportions in which the various factors can be combined to produce a product.The behaviour of these total, average and marginal products of the variable factor as a result of the increase in its amount is generally divided into three stages.Stage-I (Increasing Return)Total Product increases at an increasing rate to a particular point say F. Corresponding to the point F Marginal Product increases up to this level. From the point F Total Product goes on rising at a diminishing rate and Marginal Product starts falling -but is still higher than Average Product and the AP continues to rise. 1st stage ends where MP curve cuts AP curve from above.Stage-II (Diminishing Return)The second stage begins from the point of intersection of AP and MP curves and ends at that point where" MP is zero. At this stage both MP and AP go on falling and both of them are positive. The total product goes on rising at a diminishing rate. This stage is known as the stage of diminishing return. This is stage where a firm wishes to operate.Stage-III (Negative Return)In the third stage Marginal Product of variable factor is zero. MP curve cuts the OX-axis at point M. In this stage the Total Product starts diminishing. Total Product continues to decline. As MP is negative this stage is also known as the stage of negative return.
What are the benefits of Marginal cost?
At first, marginal cost decreases due to specialization of workers. Then, MC begins to increase steadily. The only benefits of MC are in the period of specialization.
What happens when dehydration begins to occur?
The salivary secretions decrease
What is a baby necessities that begins with the letter A?
whats a baby product that begins with the letter A?
What is involved in product development?
an idea for a product is formulated and development of the product begins. During this stage sales are zero, consumer research begins, and promotion consists of public relations
What is involved in commercial product development?
an idea for a product is formulated and development of the product begins. During this stage sales are zero, consumer research begins, and promotion consists of public relations
What is a cleaning product that starts with a?
Air freshener is a cleaning product. It begins with the letter a.
