Table of Contents
- 1 What is the relationship between marginal product of labor and marginal cost?
- 2 How do you find the marginal product of labor and capital?
- 3 What is the relationship between marginal product and marginal cost explain the connection between these two concepts?
- 4 What is the relationship between the MPL curve and the total product curve?
What is the relationship between marginal product of labor and marginal cost?
Marginal cost and marginal product are inversely related to one another: as one increases, the other will automatically decrease proportionally and vice versa. Marginal product may include the additional units made by adding a single employee.
What is the relationship between MPL and APL?
Average Product of Labor (APL) equals Q/L while Marginal Product of Labor (MPL) equals the extra output gained by hiring one more unit of labor.
How do you find the marginal product of labor and capital?
Dividing this quantity by ∆K gives the change in the production per unit change in capital, ∆Q ∆K = f(L, K + ∆K) − f(L, K) ∆K . ∂Q ∂L = aALa−1 Kb = aQ K . Thus, for the Cobb-Douglas production function, the marginal product of capital (resp. labor) is a constant times the average product of capital (resp.
What does the marginal product of labor tell us?
The marginal product of labor (or MPL) refers to a company’s increase in total production when one additional unit of labor is added (in most cases, one additional employee) and all other factors of production remain constant.
What is the relationship between marginal product and marginal cost explain the connection between these two concepts?
The marginal product shows the change in the total product when an additional unit of the variable factor is used. Marginal cost shows the change in the total cost when an additional unit of output is produced.
What is the relationship between marginal product and marginal cost Why do you suppose that is is this relationship the same in the long run as in the short run?
Marginal cost and marginal product are inversely related to one another: as one increases, the other will automatically decrease proportionally and vice versa.
What is the relationship between the MPL curve and the total product curve?
The marginal product of labor (MPL), for example, is the amount by which output rises with an additional unit of labor. It is thus the ratio of the change in output to the change in the quantity of labor (ΔQ/ΔL), all other things unchanged. It is measured as the slope of the total product curve for labor.
Why does marginal product of capital decrease?
That fact can be observed in the marginal product which begins to decrease: diminishing marginal returns. This is justified by the fact that there is not enough employees to work with the extra machines, so the value that these additional units bring to the company, in terms of output generated, starts to decrease.