Question

1. If I keep increasing one part of a process and keep everything else the same, what will eventually happen to my productivity?

Answer 1

Decrease

Step-by-step explanation:

The scenario describes in question is the theory of diminishing marginal returns. According to this theory, increasing one variable while holding the others constant increases productivity until a firm reaches the optimal level. Beyond the optimal level, the continuous addition of the input will result in declining productivity.

Productivity will turn negative if more of the unit is deployed. For example, hiring more workers increases productivity until a firm achieves the optimal level. After the optimal level, hiring an extra worker will decrease productivity per worker as the additional worker will not result in increased output.