/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q40 Return to Figure 7.7. What is th... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 7: Q40 (page 185)

Return to Figure 7.7. What is the marginal gain in output from increasing the number of barbers from 4 to 5 and from 5 to 6? Does it continue the pattern of diminishing marginal returns?

Short Answer

Expert verified

Marginal Output from 4th to 5th, 5th to 6th barber = 8 , 4 respectively.

Yes, The diminishing marginal return continues.

Step by step solution

01

Marginal Gain Concept 

Marginal Product is change in Total Product, when an additional variable factor is hired.

MP = TP n - TP n-1 , ie the difference between TP at n & (n-1) th level of output.

02

Numerical Solution 

  • MP from 4 to 5 barbers

= TP (ie quantity) from 5 barbers - TP (quantity) from 4 barbers

= 80 - 72 = 8

  • MP from 5 to 6 barbers

= TP (ie quantity) from 6 barbers - TP (quantity) from 5 barbers

= 84 - 80 = 4

03

Diminishing Marginal Returns : Explanation 

As evident from MP at 5th and 6th unit, MP has fallen from 8 to 4.

This denotes the stage of Diminishing marginal returns.

The pattern continues, as MPAT 8th unit = TP at 8 - TP at 7 = 82 - 84 = -2 , which is further lower than previous MP.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Which costs are measured on per-unit basis: fixed costs, average cost, average variable cost, variable costs,

and marginal cost?

Continuing from Exercise 7.1, the firm鈥檚 factory sits on land owned by the firm that it could rent for$30,000per year. What was the firm鈥檚 economic profit last year?

Return to the problem explained in Table 7.13 and Table 7.14. If the cost of labor remains at\(40,but the cost of a machine decreases to\)50what would be the total cost of each method of production? Which method should the firm use, and why?

The WipeOut Ski Company manufactures skis for beginners. Fixed costs are\(30.Fill in Table 7.16 for total cost, average variable cost, average total cost, and marginal cost.

QuantityVariable CostFixed CostTotal CostAverage Variable CostAverage Total CostMarginal Cost
0
0
\)30




1
\(10
\)30




2
\(25
\)30




3
\(45
\)30




4
\(70
\)30




5
\(100
\)30




6
\(135
\)30

What is a long-run average cost curve?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.