Question

Look at the table the production of cabinets the table shows how many cabinets your firm can make with different numbers of workers which witch workers does the firm begin to experience diminishing returns to labor?

Answer 1

The firm experiences diminishing returns to labor when additional workers have decreasing marginal product due to fixed capital.

The firm begins to experience diminishing returns to labor when the additional workers have decreasing marginal product.

This means that as more workers are hired, the increase in production becomes smaller, or may even start decreasing.

Diminishing marginal productivity occurs because of fixed capital, which refers to the limited amount of tools or equipment that can be used by the workers.