if the marginal production of labor is falling, is the marginal cost of producti
ID: 1200120 • Letter: I
Question
if the marginal production of labor is falling, is the marginal cost of production rising or falling? Briefly explain. If the additional output from each new worker is falling 1.the marginal cost of that output is rising due to dis-economies of scals 2.the marginal cost of that output is rising because the only additional cost to producing more output is the additional wages aid to hire more workers. 3.The marginal cost of that output is falling because the only additional cost to producing more outputs the additional wages paid to hire more workers. 4. the marginal cost of that output is rising because the total cost of labor is increasing with each additional worker. 5. the marginal cost of that output is rising due to division or labor.
Explanation / Answer
There is inverse relation between them.When MPL is falling MC is rising.
MC=w/MPL
If the additional output from each new worker is falling(MPL),the marginal cost of that output is rising because the total cost of labor is increasing with each additional worker that is additional labor is adding less to output.
so correct option is 4.
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