Answer to Question #243798 in Economics of Enterprise for Shally

Question

Graphically illustrate the impact of the management’s restructuring decision on the firm’s production function. Your diagram should have the amount of human intelligence on the horizontal axis and the number of decisions on whether to provide insurance on the vertical axis. Fully label your diagram. Note that there are no actual numbers given in this question: you may make them up or simply use appropriate notations. Briefly explain the key information of your diagram

 

Answer 1

From the diagram the production function gets flatter as the number of human intelligence increases which reflects diminishing marginal product.