law of diminishing returns

Question 1

short run

Answer 1

when there is at least one fixed factor of production

Question 2

what does the law of diminishing returns state

Answer 2

in the short run when variable factors of production are added to a stock of fixed factors of production total/ marginal product will initially rise and then fall.

Question 3

increase labour to

Answer 3

increase the output

Question 4

Mp should cut AP

Answer 4

at AP’s highest point

Question 5

increasing returns to labour

Answer 5

MP is rising as labour productivity is rising due to specialisation is taking place from workers splitting up tasks efficiently, also they are utilising previously under-utilised fixed factors of production, like using up workspace or ovens, etc

Question 6

Fixed factors of production constrain

Answer 6

production, e.g. not enough space, too many people for too few ovens

Question 7

Total product is maximised when

Answer 7

MP is 0. Because if MP is positive, then the next worker will bring in more output.