Answer to Question #274109 in Economics of Enterprise for Bibou

Question

The table shows the output of chairs at a factory when different numbers of workers are employed.

Number of workers 1 2 3 4 5

Number of chairs produced 6 17 27 32 30

Show where diminishing marginal returns to labour will set in.

Answer 1

MP(n)=TP(n)-TP(n-1)

where;

n=number of input

TP=total product

MP=marginal product

MP(1)=6

MP(2)=17-6=11

MP(3)=27-17=10

MP(4)=32-27=5

MP(5)=30-32=-2

The diminishing marginal product set in when the number of workers is 3