Answer on Microeconomics Question for maha
in the factory, six toys are produced per hour. When there are two workers in
the factory, eleven toys are produced per hour. There is a marginal product of
labor of 5 when there are two workers in the factory compared to one. When the
marginal product of labor is positive, this is called increasing marginal
returns. However, as the number of workers increases, the marginal product of
labor may not increase indefinitely. When not scaled properly, the marginal
product of labor may go down when the number of employees goes up, creating a
situation known as diminishing marginal returns. When the marginal product of
labor becomes negative, it is known as negative marginal returns.
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