Marginal product eventually diminishes because the cost of doing business increases with production. The company would need to make a change in the organization so that they can shift their production possibilities.
moarginal product of labor
As more people are hired, the marginal product of labor decreases because eventually having more and more employees will not make the company more productive.
change in output/change in labor.
Change in Quantity/ Change in Units of Labor.
The marginal product of labor is likely to increase initially because when there are more workers, each is able to specialize on an aspect of the production process in which he or she is particularly skilled. For example, think of the typical fast food restaurant. If there is only one worker, he will need to prepare the burgers, fries, and sodas, as well as take the orders. Only so many customers can be served in an hour. With two or three workers, each is able to specialize and the marginal product (number of customers served per hour) is likely to increase as we move from one to two to three workers. Eventually, there will be enough workers and there will be no more gains from specialization. At this point, the marginal product will diminish.
As more people are hired, the marginal product of labor decreases because eventually having more and more employees will not make the company more productive.
moarginal product of labor
As more people are hired, the marginal product of labor decreases because eventually having more and more employees will not make the company more productive.
change in output/change in labor.
Change in Quantity/ Change in Units of Labor.
Average Product = (Total Product) / (Labor) Marginal Product(2) = (Total Product)(2) - (Total Product)(1)
The marginal product of labor is likely to increase initially because when there are more workers, each is able to specialize on an aspect of the production process in which he or she is particularly skilled. For example, think of the typical fast food restaurant. If there is only one worker, he will need to prepare the burgers, fries, and sodas, as well as take the orders. Only so many customers can be served in an hour. With two or three workers, each is able to specialize and the marginal product (number of customers served per hour) is likely to increase as we move from one to two to three workers. Eventually, there will be enough workers and there will be no more gains from specialization. At this point, the marginal product will diminish.
marginal product of labor
A procedure through which it is considered by keeping in view economics approach that the cost of labor does not increase its marginal product cost i.e. labor cost less than marginal cost.
marginal product of labor
Marginal product of labour is no of quantity u can get by increasing labour by one quantity i.e in simple term suppose u have N labour initially and they r manufacturing P product and then u r hiring one more labour for your work keeping all other factore constant so now your production is P' so P'-P is called marginal product of labour and if u r multiplying it with price of one product u will get value of marginal product of labor.
A businesses can add more machinery to increase their marginal product of labor. With more machinery, employees will work the same number of hours, but produce more products.