According to the table below, at which level of input will diminishing average returns begin? Quantity...

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Question

Answer 1

Answer #1

Answer: Option D) 4 units of labor

Explanation: At first 3 workers the marginal productivity is increasing whereas hiring fourth worker leads to diminishing returns.

Workings: Shown in table below.

First worker= 50-0 = 50

Second worker= 130-50= 80

Third worker= 230-130 = 100

Fourth worker= 320-230= 90 & so on.

Answer 2

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