ncreasing marginal returns mean that marginal product is greater for each subsequent unit of a variable input than it was for the previous unit. Decreasing marginal returns, as such, mean that marginal product is less for each subsequent unit of a variable input than it was for the previous unit.
Three stages of production are increasing marginal returns, diminishing marginal returns, and negative marginal returns.
a]increasing marginal returns b]diminishing returns c]negative returns
Marginal cost curve is u-shaped curve, this is due to law of variable proportion(return to factors), firstly, there is an increasing return (i.e, decreasing cost) then there is a stage of constant returns (i.e, constant cost) then lastly comes the stage of decreasing returns (i.e increasing cost), that`s why marginal cost curve first slopes downward and then slope upward and become u-shaped.
Each additional worker has less and less tools and equipments to work with consequently , the productivity of marginal worker eventually decreases
Marginal Cost will keep increasing (have upward slope) because of the principle of diminishing marginal returns. The MC curve above the its intersection with AVC is the Supply Curve *because below minimum AVC, the firms stops production)
Three stages of production are increasing marginal returns, diminishing marginal returns, and negative marginal returns.
The short answer would be supply and demand. As demand for the firms increase, they will experience increasing returns. Likewise, as demand decreases, so do their returns.
a]increasing marginal returns b]diminishing returns c]negative returns
It occurs when an additional unit of labour employed brings a marginal product greater than the previous marginal product.
Marginal cost curve is u-shaped curve, this is due to law of variable proportion(return to factors), firstly, there is an increasing return (i.e, decreasing cost) then there is a stage of constant returns (i.e, constant cost) then lastly comes the stage of decreasing returns (i.e increasing cost), that`s why marginal cost curve first slopes downward and then slope upward and become u-shaped.
The level at which marginal production goes up with new investment is generally referred to as the point of diminishing returns. Beyond this point, each additional unit of investment yields a smaller increase in output or productivity. This occurs as resources become more scarce or inefficiently allocated, resulting in a decrease in the marginal return on investment.
Each additional worker has less and less tools and equipments to work with consequently , the productivity of marginal worker eventually decreases
Marginal Cost will keep increasing (have upward slope) because of the principle of diminishing marginal returns. The MC curve above the its intersection with AVC is the Supply Curve *because below minimum AVC, the firms stops production)
diminishing marginal returns
diminishing marginal returns
As the number of new employees increases the marginal product of an additional employee will be less than the previous employee which can cause a firm to experience diminishing marginal returns.
As more inputs of production are switched from the production of one good to another, their marginal output is decreasing (see: diminishing returns to capital).