spset to learn that, during this time ng levels of production, the CEO of Canadi
ID: 348858 • Letter: S
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spset to learn that, during this time ng levels of production, the CEO of Canadian Fabrication and Design was e of expansion, productivity of the newly hired sheet metal workers product declined supervised, the CEO instructed the productivity. Explain carefully in the terms of production theory why it might be that no with each new worker hired, Believing that the new workers were lazy or inefficiently shop foreman to "crack down" on the new workers to bring their amount of cation and Design? ?. At the management luncheon. two managers were overheard arguing about the following statement: "A correct? If so, why? If not, explain why not? causes diminishing returns". Is this statementExplanation / Answer
1) The main reason for low productivity is lack of enough capital for workers to use which may include tools and space. The best method is to invest in more capital
2) This statement is not correct. Diminishing return is that stage of production where the increase in input should be stopped, but the employer can still hire a new person if the value of marginal product is above the wage rate. If we look at the equation P x MP= input price, if wage rates decline it will hire more person. Or if the value of MP increases due to an increase in product price, it can still hire new person. That's why the demand for inputs is downward sloping.
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