Question

Suppose that a firm begins to hire workers for a newly completed plant with a fixed amount of machinery. As the firm hires additional workers, one would expect the marginal product to

Answer 1

As a firm hires more workers, the marginal product increases at first but then begins to decline due to the law of diminishing marginal productivity, which occurs when fixed capital becomes a limiting factor.

Step-by-step explanation:

When a firm begins to hire additional workers for a plant with fixed machinery, one would initially expect that the marginal product of each additional worker might increase, as workers can complement the use of the capital more effectively. However, due to the law of diminishing marginal productivity, as more workers are hired, each additional worker contributes less to the total output because the fixed amount of capital becomes a limiting factor. For example, while the second worker might answer the phone, freeing up others to work more efficiently, eventually adding more workers will lead to overcrowding and a lack of sufficient equipment for everyone, causing the marginal product to decline. This concept explains why, after a certain point, adding more workers results in diminishing returns on productivity.

Answer 2

Answer: Rise initially, but eventually fall.

Step-by-step explanation:

The increase in the workers brought would increase the marginal product; there would be increase in production based on the number of persons that were engaged but the marginal cost might eventually fall in the future because of human management and resilience from the workers that were brought