Question

Question 1:

Explain marginal product and the connection to labor

Mathematically use the marginal product to show a reduction in the change in output

Described the connection between marginal product and marginal cost

Solved for marginal cost using the production function or marginal product equation

Used the rules about the long run to explain why the firm has increasing or decreasing returns to scale

Answer 1

Marginal product are those product which occur when additional unit of input is added to production and its connection with labor is shown by when total production is increase by increasing labor per unit but putting all other input remain the same.

Connection between marginal product and marginal cost.

Marginal cost are those cost which are used to produce one additional unit of product whereas Marginal product are those extra output which are generated by one additional unit of input.

Why the firm has increasing or decreasing returns to scale?

In the long run there are no fixed input as such marginal return and especially the law of diminishing marginal return do not operate and thus do not guide production and cost. Instead long run marginal cost is affected by increasing and decreasing return to scale which translates into economics of scale and diseconomies of scale so according to this question we expalin with the help of return to scale in which increasing return to scale occurs when the total output may increase by large proportion than the increase inputs during production process and also technical and managerial individual, higher degree of specialization and dimensional relations are factors behind increasing returns to scale while decreasing when proportion output is less than the desired increased input during production process.

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