Question

The graph to the right illustrates the average product of labor. Use the​ three-point curved line drawing tool to graph the marginal product of labor. Properly label this curve. Carefully follow the instructions​ above, and only draw the required objects. Why do the marginal product of labor and the average product of labor curves have the shapes illustrated in the​ graph?

Answer 1

The marginal product of labor curve typically intersects the average product of labor curve at its maximum point due to diminishing returns.

Step-by-step explanation:

The shapes of the marginal product of labor (MPL) and average product of labor (APL) curves are influenced by the law of diminishing returns. Initially, as more units of labor are added, both MPL and APL rise. MPL depicts the additional output gained by employing one more unit of labor, while APL represents the average output per unit of labor. However, as the law of diminishing returns sets in, MPL starts declining while remaining positive. This decline occurs because adding more units of labor to fixed resources leads to diminishing efficiency or productivity per additional unit of labor. Consequently, the MPL curve begins to slope downward after reaching its maximum point, intersecting the APL curve at its peak.

The APL curve, on the other hand, first rises, peaks, and then starts declining due to diminishing returns. Initially, as MPL exceeds APL, the APL curve rises. However, when MPL falls below APL, the APL curve begins its descent. The point where MPL intersects APL at its maximum signifies the peak of productivity where APL is at its highest before the diminishing returns affect overall efficiency. Both curves mirror the impact of diminishing marginal returns on productivity as more units of labor are added to fixed inputs.