answersLogoWhite

0

Increased labor productivity typically leads to a reduction in average costs for businesses. When workers produce more output per hour, fixed costs are spread over a larger number of units, decreasing the average cost per unit. Additionally, higher productivity can reduce variable costs associated with labor, further contributing to cost savings. Ultimately, this can enhance competitiveness and profitability for firms.

User Avatar

AnswerBot

1d ago

What else can I help you with?

Continue Learning about Economics

What are the determinants of average labor productivity?

Land natural resources


How does the specialization of labor contribute to increased productivity?

Specialization of labor increases productivity by allowing individuals to focus on specific tasks they are skilled at, leading to efficiency, expertise, and time savings in completing those tasks. This division of labor enables workers to become more proficient in their specialized roles, ultimately leading to higher overall productivity in a workforce.


How changes in productivity of labor will effect the ppc?

Changes in labor productivity can significantly impact the production possibilities curve (PPC). If labor productivity increases, the economy can produce more goods and services with the same amount of resources, effectively shifting the PPC outward. Conversely, a decrease in labor productivity would restrict output potential, causing the PPC to contract. These shifts reflect the economy's ability to efficiently utilize its resources and maximize production.


Can labor productivity decline as total output is rising?

NO. The labor productivity will rise together with total output. Vice versa


Why does the marginal cost curve cut through the average variable cost curve exactly at the minimum of the average variable cost curve?

Marginal cost curve cuts average cost (variable or total cost) at its minimum simply to portray the law of variable proportions. The idea is as labor is increased with capital being fixed, productivity increases upto a point and then decreases and later becomes negative. To relate the same productivity with average cost function, the average cost first decreases , reaches a minimum and then increases. Now marginal cost is just a change in the total cost. Logic says that when MC is less than AC productivity is favourable, thus cost is falling. When MC is more than AC productivity is not favourable and thus the rising portion of the cost curve. When MC = AC , the productivity that was reducing the average cost per unit has maximized and from then on starts rising cost(or decreasing productivity). That is the only point where they can intersect.

Related Questions

What are the determinants of average labor productivity?

Land natural resources


How does the specialization of labor contribute to increased productivity?

Specialization of labor increases productivity by allowing individuals to focus on specific tasks they are skilled at, leading to efficiency, expertise, and time savings in completing those tasks. This division of labor enables workers to become more proficient in their specialized roles, ultimately leading to higher overall productivity in a workforce.


What is the effect of outsourcing on the labor market in the United states?

The supply of workers has increased!


How changes in productivity of labor will effect the ppc?

Changes in labor productivity can significantly impact the production possibilities curve (PPC). If labor productivity increases, the economy can produce more goods and services with the same amount of resources, effectively shifting the PPC outward. Conversely, a decrease in labor productivity would restrict output potential, causing the PPC to contract. These shifts reflect the economy's ability to efficiently utilize its resources and maximize production.


What has the author Nathalie Greenan written?

Nathalie Greenan has written: 'Computers and productivity in France' -- subject(s): Computers, Economic aspects, Economic aspects of Computers, Effect of computers on, Industrial productivity 'Information technology and research and development impacts on productivity and skiils' -- subject(s): Capital productivity, Computer technicians, Computers, Economic aspects, Economic aspects of Computers, Economic aspects of Information technology, Effect of computers on, Electronic technicians, Electronics, Industrial productivity, Information technology, Labor productivity, Research, Skilled labor


What was a effect of the Industrial Revoultion?

An effect of the industrial revolution was increased production and increased child labor. (Oh, wait, that's two. Oh well. Take your pick. =D


What role did the division of labor play in helping to increase production during the indutrial revolution?

Division of labor, helped increase productivity and gave birth to the factory system, which entailed increased division of labor and specialization of function.


What was the effect of the new cottonseed on the industry?

Cotton production increased, requiring more labor to harvest.


What effect does decreasing automation have on a company?

Decreasing automation can lead to reduced efficiency, slower production speed, increased error rates, and higher labor costs for a company. This can result in lower productivity levels and competitiveness in the market compared to companies that embrace automation.


What is the average installation price per sq ft of fiberglass insulation?

As of 2014, the average installation price per sq ft of fiberglass insulation is $0.76. This is based on labor productivity rates and national average hourly labor wages.


Increased productivity and immigration led to what conditions in the late 1800s?

Increased productivity and immigration led to the Consumer Revolution in all sectors of the country and brought about high investment levels, high productivity and high employment. As a result, the population of northeastern cities burgeoned exponentially, mainly due to the influx of immigrants.


Can labor productivity decline as total output is rising?

NO. The labor productivity will rise together with total output. Vice versa