Question

Units of Fixed Input Units of Variable Input Quantity/ Output Marginal Product Average Product 0 29 70 0 36 45 48 45 36 21 0 -27 -60 0 29 35 39 0 164 205 234 245 232 189 39 35 29 21 9

Using the information above.

1. Trace/graph the stages of production

2. Identify the point of diminishing returns

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Answer #1

MP AP 0 0 0 29 29 Increasing Returns as MP is rising 35 39 41 41 Diminishing Returns as MP is falling 39 35 29 21 70 45 4 164

Point of diminishing returns at Q = 7.

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