Question: In a manufacturing plant with no labor, adding labor increases output and marginal product. However, at some point increasing labor will no longer increase output
In a manufacturing plant with no labor, adding labor increases output and marginal product. However, at some point increasing labor will no longer increase output at the same rate. Adding even more labor eventually causes marginal product to decline, because there will simply not be enough space for so many workers to work. This is an example of the law of eturns.
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