a. Over what output range does Sue’s Surfboards enjoy the benefits of increased specialization and division of labor?
b. Over what output range does the firm experience diminishing marginal product of labor?
c. Over what output range does the firm experience an increasing average product of labor but a diminishing marginal product of labor?
The table sets out Sue’s Surfboards’ total product schedule.
Labor Output
(workers (surfboards
per week) per week)
1 …………………….. 30
2 …………………….. 70
3 ……………………..120
4 ……………………..160
5 ……………………..190
6 ……………………..210
7 ……………………..220